Preamble

The House met at Half past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

CITY OF LONDON (VARIOUS POWERS) BILL

Read the Third time, and passed.

ESSEX COUNTY COUNCIL BILL (By Order)

Second Reading deferred till Thursday next.

WEST HARTLEPOOL EXTENSION BILL (By Order)

Second Reading deferred till Thursday next, at Seven o'clock.

Oral Answers to Questions — COMMONWEALTH RELATIONS

Colombo Plan

Mr. Leslie Hale: asked the Under-Secretary of State for Commonwealth Relations whether he will make a full and detailed statement of the progress now being made with the South-Eastern Asia Development Plan originated at the Colombo Conference; and to what extent the pursuance of this plan will be affected by the decisions of the Conference of Commonwealth Finance Ministers.

The Under-Secretary of State for Commonwealth Relations (Mr. John Foster): A meeting of the Consultative Committee of the Colombo Plan for cooperative development in South and South-East Asia is being held in Karachi in ten days' time. Most of the delegations will be led by ministers. It is expected that a report will subsequently be published which, among other things, will set out in detail the progress which has been made to date on the programmes of the individual countries concerned. Full and detailed information on such progress is not at

the moment available in the United Kingdom; I understand, however, that many of the projects included in the programmes are now under way. As the hon. Member is aware, the communiqué issued at the conclusion of the Finance Ministers' meeting emphasised the need for developing the productive power of the sterling area.

Mr. Hale: With respect, does the hon. and learned Gentleman think that that is a reply to the Question? Surely it is known whether the proposals made at the Colombo Conference are being carried out—[Interruption.] I hear an interjection that they cannot be, and that is what we suspect. We are entitled to know, and would the hon. and learned Member tell us why Her Majesty's Government are not aware of the progress which has been made up to now?

Mr. Foster: I said that full and detailed information was not available in the United Kingdom, but at the moment a delegation is considering the whole matter in Karachi.

Sir Herbert Williams: May I ask my hon. and learned Friend who will provide all the money for this ambitious project?

Mr. Foster: That is another question.

Cattle Ranching Scheme, Northern Bechuanaland

Mr. Hale: asked the Under-Secretary of State for Commonwealth Relations whether he will make a statement on the progress of the cattle ranching scheme in Northern Bechuanaland; and whether he is satisfied that adequate provision has been made in case of drought.

Mr. J. Foster: The Colonial Development Corporation will publish details of the progress of this scheme in their annual report for 1951. Provision against drought is a matter of ranch management; the project is still in its very early stages, but I understand that the Corporation are satisfied that reasonable precautions will be taken.

Mr. Hale: But in my Question I asked the Under-Secretary whether he is satisfied that sufficient provision has been made against the possibility of drought? Experts are saying openly that no provision has been made. Will the hon. and learned Gentleman tell us what is his own view on this matter?

Mr. Foster: The Corporation must be liable for the precautions, and I understand from the Corporation that reasonable precautions will be taken.

Mr. Hale: What precautions have been taken?

Mr. Foster: The detailed precautions are a matter for the Corporation.

Mr. Gordon Walker: Does the hon. and learned Gentleman realise that his noble Friend is, of course, responsible for the broad direction of this project, and will he bear in mind that the tendency of people engaged in this sort of thing is to start off on too big a scale[HON. MEMBERS: "Oh!"]—it will be just the same now as it was in the past—and also the necessity of seeing that their experiments are kept small enough and no bigger than is necessary to establish the facts?

Mr. Foster: I will naturally bring that point to the attention of my noble Friend.

Commonwealth Consultation

Lieut.-Colonel Sir Thomas Moore: asked the Under-Secretary of State for Commonwealth Relations what steps have so far been taken to set up a Commonwealth Council, so as to deal rapidly and effectively with problems of common interest as they arise.

Mr. J. Foster: The United Kingdom Government have always been ready to expand and develop existing machinery for Commonwealth consultation. My hon. Friend will, however, no doubt recall the statement in the communiqué issued by the 1946 Prime Ministers' meeting which says that the methods now practised are preferable to any rigid centralised machinery. There is no reason to believe that there has been any subsequent change in the views of other members of the Commonwealth.

Sir T. Moore: I did not mention anything about a rigid system. Would not my hon. and learned Friend consider that such an organisation as is proposed in the Question would be more effective than the somewhat loose liaison system now in force?

Mr. Foster: No, Sir. The only effective means are means which are acceptable to all members of the Commonwealth.

Oral Answers to Questions — TRADE AND COMMERCE

U.K. and Irish Republic (Leather Footwear)

Mr. William Shepherd: asked the President of the Board of Trade the amount of the imports of leather footwear from Eire in the last six months of 1951; and how far British exports to Eire enjoyed the unrestricted entry accorded to Eireann imports into this country.

The President of the Board of Trade (Mr. Peter Thorneycroft): Three hundred and forty-two thousand pairs of leather footwear, valued at £400,000 were imported from the Irish Republic during the last six months of 1951. Imports of leather footwear into the Irish Republic are subject to quantitative restriction, a single quota being fixed annually for imports from all sources. During 1951 the United Kingdom supplied the bulk of leather footwear imported into the Republic within the quota of 20,000 pairs.

Mr. Shepherd: Does not my right hon. Friend realise how serious and unfair this is to the British footwear trade? Will he take immediate steps to see that any arrangements between this country and Eire are on a reciprocal basis?

Mr. Thorneycroft: It would, of course, be fair to say that we have a very much bigger share of their market than they have of ours.

Rayon

Mr. Shepherd: asked the President of the Board of Trade if he is aware that most countries tax the import of rayon on the basis of its being a silk product; if he has considered the deterrent effect this has upon our export of rayon goods: and what steps he is taking to bring the classification more in line with the present use and cost of rayon.

Mr. P. Thorneycroft: Yes, Sir. We shall continue to press overseas Governments as opportunity offers to reduce their duties on rayon by reclassification or otherwise as may be most appropriate.

Mr. Shepherd: Is my right hon. Friend able to say what has happened since the previous representations were made on this issue?

Mr. Thorneycroft: Naturally, we have not been as successful as we should wish


—nobody ever is—but it has to be remembered that our own system of import duties places rayon rather nearer to silk than to cotton.

U.S. Films (Unremittable Earnings)

Mr. Shepherd: asked the President of the Board of Trade how the non-remittable earnings of United States film producers in the United Kingdom have been expended.

Mr. P. Thorneycroft: During the period 14th June, 1948, when the first Anglo-American Film Agreement came into operation, to 31st December, 1951, United States film companies spent £22–23 million of their unremittable film earnings. This money has been applied to the various purposes specified in the Agreement, in particular, to film production in the sterling area, which has accounted for over £8 million of the total expenditure. Other expenditure has included the acquisition of distribution rights of British films, payments for prints, and for personal services, travel and living expenses.

Mr. Niall Macpherson: Can the right hon. Gentleman say whether it is possible for American interests to remit earnings from the re-investment of the blocked earnings?

Mr. Thorneycroft: I understand that the total amount of remittable earnings is fixed.

Southern Electricity Board (Tariffs)

Captain Richard Pilkington: asked the President of the Board of Trade whether he has made any estimate of the extra expense which will be caused to industry in the area affected through the higher tariffs proposed by the Southern Electricity Board, due in part to reduced consumption by consumers.

Mr. P. Thorneycroft: No, Sir. I have no information which would enable an estimate to be given of what additional charges may have to be borne by a wide variety of industry as a result of any increase which may be made in these tariffs.

Captain Pilkington: As these higher tariffs are most burdensome on industry and also on the home, is there any possibility of de-nationalisation or has the damage been done?

Clothing

Mr. Norman Dodds: asked the President of the Board of Trade what progress has been made by the committee of the Clothing Industry Development Council in looking into the problem of informative labelling of clothing as an aid to maximum serviceability.

Mr. P. Thorneycroft: I understand that substantial progress has been made by the Clothing Industry Development Council in the difficult task of securing general agreement on the use of trade descriptions which could be embodied in a labelling scheme for the information of consumers.

Mr. Dodds: Is the right hon. Gentleman in favour of some system under which articles will have some sort of definition which will indicate to purchasers whether or not the goods should be sent to the cleaners?

Mr. Thorneycroft: We may be discussing these matters later in the afternoon.

Mr. Dodds: I have been caught that way before, Mr. Speaker. Could I now have an answer "Yes" or "No" to that very simple question, which later might be lost in a welter of words?

Mr. Thorneycroft: I know the very proper interest which the hon. Gentleman has in this subject, and I can assure him that I have paid great attention to the speeches he has made upon it.

Mr. Dodds: asked the President of the Board of Trade if he is aware of the increasing amount of clothing now being made which is not up to standard; that concern has been expressed at this state of affairs by the Scottish Light Clothing Manufacturers' Association; and what action he proposes to deal with this problem.

Mr. P. Thorneycroft: I have no evidence that the amount of sub-standard clothing on sale to the public is increasing, and no representations on this subject have been made to my Department by the Scottish Light Clothing Manufacturers' Association.

Price Control

Mrs. Barbara Castle: asked the President of the Board of Trade what articles have been freed from price control by his Department since the present Government took office.

Mr. P. Thorneycroft: With the hon. Member's permission, I will circulate a list in the OFFICIAL REPORT.

Mrs. Castle: Does the right hon. Gentleman's reply indicate that the list is so extensive that it has to be published rather than read out in this House, and will he not agree that at a time when, by cutting imports, we are reducing supplies, this is another betrayal of the Government's promise in the Election to keep down the cost of living and to protect the consumer?

Mr. Thorneycroft: I am glad to say that the list involves some 27 classes of goods. It was put into effect by seven Orders. In many cases the prices have gone down rather than up. The whole operation was carried out in consultation with the Central Price Regulation Committee.

Mrs. Castle: Can the right hon. Gentleman give the House some examples where prices have gone down and an indication of what guarantee he has that they will not go up as a result of the policy of the Government?

Captain J. A.. Duncan: Was not the object of de-controlling these articles to encourage competition and thus reduce prices?

Mr. A. G. Bottomley: In present circumstances, if necessary, would the right hon. Gentleman re-introduce price control?

Mr. Thorneycroft: Certainly. I will watch the position constantly. If there were a need for price control we should impose it; but it is foolish to use price control when market conditions do not call for it.

Following is the list:
A. Goods controlled by Maximum Price Orders made under the Goods and Services (Price Control) Act, 1941, and under Defence Regulation 55AB:

Certain non-utility apparel.
Knitting wools.
Standard wedding rings.
Matches.
Alarm clocks.
Watch straps and chains sold separately from watches.
Office stationery, stationers' sundries and pen nibs.
Portable lamps of all descriptions not operated by electricity or gas (except miners' safety lamps).

Lighting fittings of a kind used for interior domestic or office lighting, otherwise than by electricity or gas.
X-ray plates and films.

B. Goods formerly controlled under the Prices of Goods (Price Regulated Goods) Order:

Miscellaneous floor coverings other than carpets and linoleum and printed felt base.
Dictaphones, calculating machines and other office machinery and cash registers.
Containers (crates, boxes, bags, cartons, bottles, etc.).
Paint, distemper, stain, varnish and lacquer.
 Household soaps and soap made up for sale as toilet soap.
Wallpaper.
Wrapping paper.
Paraffin oil, kerosene and turpentine sold by retail for domestic use.
Hand tools for use by workpeople in the course of their trade.
Hand-propelled and mechanically-propelled invalid carriages, invalid chairs and invalid tricycles.
Spectacles and spectacle cases, lorgnettes, pince-nez, monocles and spy glasses.
Sanitary towels and substitutes therefor.
Industrial threads and some domestic sewing cottons and threads.
Home-manufactured carpets other than price control group carpets and coir and sisal mats and matting.
Oil baize, oil cloth and leather cloth.
Ropes and twines.
Sewing machines, component parts thereof and accessories therefor.
Feathers and down and other upholstery stuffing materials.

Note: The prices of certain of these goods remain subject to non-statutory arrangements between the suppliers and the Central Price Regulation Committee or the Board of Trade.

National Research Development Corporation

Mr. Arthur Colegate: asked the President of the Board of Trade whether he will make a statement on the work of, or the results achieved by, the National Research Development Corporation.

Mr. P. Thorneycroft: The second annual report of the Corporation (H/C. 83, 1951–52 Session) published on 12th February gives a full and factual statement of the work in hand. In my opinion the Corporation have made satisfactory progress in bringing inventions into use and have laid the foundations of what will, I am sure, be a valuable long-term investment in British inventiveness.

Dollar Tobacco Purchases

Mr. Douglas Dodds-Parker: asked the President of the Board of Trade what percentage cuts in the purchase of dollar tobacco are being made in 1952 on 1951 purchases from the United States of America and Canada, respectively.

Mr. P. Thorneycroft: Our purchases of dollar tobacco in 1952 will be substantially less than in 1951, but I can assure my hon. Friend that the cut will not fall proportionately more heavily on Canada than on the United States.

Consumer Advisory Service

Miss Elaine Burton: asked the President of the Board of Trade what progress has been made by the Departmental Committee set up to consider the proposal that a consumer advisory service should be established.

Mr. P. Thorneycroft: No such committee has been set up.

Miss Burton: As the predecessor of the right hon. Gentleman said in July last that such a committee would be set up if time permitted, does not the right hon. Gentleman agree that now that the Utility scheme has been scrapped such a service is essential to the consumers of this country?

Mr. Thorneycroft: The question of the Utility scheme is something which we certainly shall be discussing later.

New Potato Imports

Mr. Gerald Williams: asked the President of the Board of Trade what quota of new potatoes is allowed into the country during the first six months of this year.

Mr. P. Thorneycroft: New potatoes can be imported without quota restriction from certain countries under open general licence, but this licence is subject to suspension during the main season for marketing the home crop. It is proposed this year to suspend the open general licence for new potatoes from 1st June to 31st July, during which period no imports will be licensed: these arrangements are subject to review in the light of supplies available from home production.

Mr. Williams: Why cannot we have British potatoes all the year round? Does my right hon. Friend agree that new potatoes are a luxury and that we can grow very good potatoes in this country? Will he do all he can, if not this year then next, to encourage farmers to grow enough potatoes so that we do not have to import new potatoes at this time of the year?

Mr. Thorneycroft: I am always perfectly willing to enter into discussions with the National Farmers' Union or other interested parties to see that the whole problem is considered.

Car Accessories (Profits)

Miss Burton: asked the President of the Board of Trade whether he is aware of the excessive profits being made by monopolistic practices on the part of car accessories manufacturers; and if he will refer the matter to the Monopolies Commission for investigation.

Mr. P. Thorneycroft: Without expressing any opinion on the allegations in the first part of the Question, I think that there is evidence that this matter comes within the scope of the Monopolies Act, and I will consider it when I next select matters to refer to the Commission.

Miss Burton: In thanking the right hon. Gentleman for that reply, might I ask him whether he is aware that sparking plugs costing 6d. each are sold to the motorist at 5s. to 5s. 6d. each and that on the sale of upper cylinder lubricants the dealers make a profit of 82 per cent.?

Mr. Thorneycroft: Those are, of course, the kind of matters which should be considered by the Commission.

Nylon Goods

Mrs. Jean Mann: asked the President of the Board of Trade if he will give comparable value of exports of nylon stockings this year, with exports 1949 and 1950, and how far these exports reveal recent changes in denier texture.

Mr. P. Thorneycroft: Exports of nylon stockings in January, as recorded in the Trade and Navigation Accounts, totalled £446,000, compared with a monthly average of £247,000 during 1949 and of £458,000 in 1950. These figures do not include exports by parcel post. The trade returns do not show the texture of the nylon stockings exported.

Mrs. Mann: I am not good at mental arithmetic when I am on my feet, and am not able to distinguish the exact difference between these exports. Could the Minister give any indication whether it is true to say that the 15-denier stocking is not popular now, and that our customers abroad are preferring the 30-denier stocking?

Mr. Thorneycroft: It is very difficult to differentiate between the various types of stocking, but the 15-denier is what is known as sheer, and the 30-denier stands up to harder use. I would not be prepared on these figures to differentiate between the two.

Mrs. Mann: Could I ask the right hon. Gentleman if we are exporting the 30-denier stocking, and if he would consider having a large quantity of them made available for British women, who prefer the harder-wearing stocking? Would it be possible to have a bigger output from the manufacturers of 30-denier stockings, so that all women, both at home and abroad, would be satisfied?

Mr. Dodds: Never.

Mr. George Chetwynd: Would the right hon. Gentleman have a sample of these stockings placed in the Library, so that we may see for ourselves?

Mrs. Mann: asked the President of the Board of Trade what steps are taken to prevent overcharging in regard to the sale of nylon stockings, and particularly those of sub-standard quality which are not so revealed at time of purchase.

Mr. P. Thorneycroft: Prices of nylon stockings are controlled. During the last nine months there were 311 prosecutions for overcharging on nylon stockings, but I am unable to say how many of these were concerned with sub-standard articles.

Mrs. Mann: Is the right hon. Gentleman aware that it is a common practice to charge 12s. 6d. for sub-standard stockings that should be sold at 6s. 6d., and would it not be possible to have the substandard mark on the welt of the stocking so that women would know whether the article was sub-standard or not?

Mr. Thorneycroft: I understand that manufacturers normally sell nylons which are marked as imperfect or "seconds" at the reduced price.

Mrs. Mann: The mark is not visible to the customer. It may be in the agreement between the shopkeeper and the maker, but it is certainly not known to the person making the purchase.

Mr. Colegate: Is it not time that nylon stockings were decontrolled, in view of the present state of supplies, and all these criticisms obviated?

Mr. Gerald Nabarro: asked the President of the Board of Trade what is the anticipated output of nylon yarn for 1952 compared with 1951; whether all required capital investment for the industry will be permitted during 1952, in view of the foreign currency earning potentialities of nylon products; and what increase of nylon stockings for the home market can be anticipated this year.

Mr. P. Thorneycroft: I understand that production at the moment is running at the rate of about 10 million lb. a year. As this yarn is produced by one firm only, I do not think that it would be proper for me to disclose detailed figures of their output in 1951 and estimated output in 1952.
With regard to the second part of the Question, I would refer my hon. Friend to the statement on capital investment which was made by my right hon. Friend the Chancellor of the Exchequer on 29th January. I cannot say whether it will be possible to fit all projects for expansion in this industry into the programme, but in considering these, due regard will, of course, be had to the importance of nylon both for export trade and for defence. Within the limited total production, requirements for defence and export must be given first call on supplies and I am not able to say how much yarn will be available this year for making stockings for the home market.

Industry, London (Decentralisation)

Mr. J. A. Sparks: asked the President of the Board of Trade what progress has been made in the decentralisation of industry from London and the inner urban areas.

Mr. P. Thorneycroft: Since 1948, 61 new factories, equivalent to a floor area of approximately 1½ million square feet, have been built or are being built in the new towns or on L.C.C. estates for firms from inner London. Forty more projects


have been given industrial development certificates; six of these have so far been given building licences, but work has not yet commenced.
These figures take no account of a large number of factories built since the war for London firms in the development areas and in other parts of the country.

Mr. Sparks: Is the right hon. Gentleman aware of the great importance of accelerating this process of industrial decentralisation if we are ever to solve the housing problem and the overcrowding which exists in London and the surrounding area?

Mr. Thorneycroft: I am, of course, well aware of the problem, but the hon. Gentleman will appreciate that difficulties of capital investment do put some term and limit on its solution.

Mr. Thomas Price: Does the right hon. Gentleman understand that some of the people whom I represent, in one of the apparently forgotten areas of Lancashire, view with great concern the continued growth and expansion of London, which they regard as being at the expense of provincial areas which have been designated as Development Areas, but which are not getting a fair allocation of new industries, for which we have pleaded for so long?

Mr. Thorneycroft: The interests of Lancashire will certainly not be forgotten.

Anglo-German Agreement

Mr. R. Brooman-White: asked the President of the Board of Trade whether he can now give any further information on the trade agreement with Germany; and, in particular, what increase in imports of steel scrap may be expected in comparison to last year.

Mr. P. Thorneycroft: Yes, Sir. The new agreement with Germany, which was signed on 4th March, has effect for the 12 months up to 31st December next. The agreement relates for the most part to the provision of quotas for goods which are subject to import restrictions in either country. In view of the reversal since last year in the balance of trade and payments between Germany and the sterling area, the quotas for United Kingdom and colonial exports to Germany are increased, and the quotas for our own

imports from Germany are reduced, in relation to the levels provided for in 1951.
The question of supplies of steel scrap was not discussed in the negotiations. German exports of steel scrap to this country are covered by a separate agreement, concluded last September between the German Federal Chancellor and the United States and United Kingdom High Commissioners in Germany, under which a percentage of Germany's exportable surplus is guaranteed to the United States and the United Kingdom until next June.

Mr. Brooman-White: Is not the right hon. Gentleman aware that the steel industry in Scotland is suffering grievously as a result of the inadequate provisions in regard to steel scrap made in the negotiations by his predecessor, and is there any hope that the situation may be improved?

Mr. F. J. Bellenger: May I ask the right hon. Gentleman whether the details of this trade agreement are published in any official publication which is available to hon. Members of this House?

Mr. Thorneycroft: I do not think there is any secret about supplies of scrap. Does the right hon. Gentleman mean the agreement or the scrap?

Mr. Bellenger: The agreement.

Mr. Thorneycroft: Perhaps the right hon. Gentleman will put that Question down.

Furniture and Bedding

Mr. Austen Albu: asked the President of the Board of Trade whether he will consider introducing legislation to ensure that mattresses and upholstered furniture carry marks or labels stating the nature of the filling material used in their manufacture.

Mr. P. Thorneycroft: I am considering most carefully the best means to ensure that the public can identify good quality mattresses and furniture, but I am not convinced that legislation of the kind suggested by the hon. Member is the best means of achieving this.

Mr. Albu: Does not the President think that it is necessary that the public should be aware that much of the filling material in mattresses is not new, but second-hand rag flock material?

Mr. Thorneycroft: I certainly think that arrangements are necessary to safeguard the production of reasonable quality in the case of mattresses, but I am not satisfied that the precise method suggested by the hon. Member is necessarily the best one.

Colonel Alan Gomme-Duncan: asked the President of the Board of Trade if he is aware of the serious effect on the public in Scotland, and on the retail furniture trade there, as a result of the high and inequitable freight charges imposed by the British Transport Commission on furniture carried from the manufacturers in the South of England to Scotland; and if he will make representations to the Transport Commission with a view to remedying this.

Mr. P. Thorneycroft: I am aware that these charges have been increased. The Transport Act, 1947, provides opportunities for the making of representations about charges through the Transport Users' Consultative Committees, and I suggest that the matter should be pursued through those channels.

Colonel Gomme-Duncan: As efforts have already been made to represent these difficulties, will the Minister give further consideration to the question that he should exert a little pressure in the interests of the retail furniture trade in Scotland?

Mr. Thorneycroft: To start with, I think we might try the usual channels and the consultative committee once more.

Mr. A. C. Manuel: Is the right hon. Gentleman aware that the furniture industry in Scotland is world famous and that in my constituency there are certain factories whose products are well known; and presently, when we have unemployment, will the right hon. Gentleman refuse to aid the importation into Scotland of shabby furniture, which would make the unemployment there even greater?

Mr. Thorneycroft: I do not think we can keep transport charges specially high in order to prevent all furniture from entering Scotland.

Mr. W. W. Astor: Is my right hon. Friend aware that the furniture trade have made representations through the proper channels and that they have got no answer at all? Will he expedite consideration of the matter?

Mr. Sparks: asked the President of the Board of Trade what is his present policy with regard to the furniture and bedding Utility schemes.

Mr. P. Thorneycroft: I would ask the hon. Member to await the statement on this subject which I hope to make in the course of the debate today.

Resale Price Maintenance

Mr. W. T. Williams: asked the President of the Board of Trade what action he proposes to take to implement the recommendations of the Lloyd Jacob Committee on Resale Price Maintenance.

Mr. P. Thorneycroft: I would refer the hon. Member to my reply on 28th February to the hon. Member for Uxbridge (Mr. Beswick).

Mr. Williams: That is not the Question which I asked. The hon. Member for Uxbridge asked what legislation the right hon. Gentleman was intending to produce, and I am asking the Minister if he intends to take any action in this matter. Perhaps he will tell us that?

Mr. Thorneycroft: The answer is, as the hon. Member knows, that the matter is extremely complex, and that it is still under consideration.

Sir T. Moore: Is my right hon. Friend aware that the Trades Union Congress has come out in favour of price maintenance as a means of avoiding a price-cutting war, which would do harm both to shopkeepers and customers alike?

Mr. James Hudson: Is the right hon. Gentleman aware that this committee proposed both the re-institution of competition and the reduction of prices in retail trade, and will the right hon. Gentleman remember that, on both these matters, explicit promises were made at the General Election, or is it the case that all the promises have been forgotten?

Mr. Ian Harvey: Is my right hon. Friend aware that his predecessor issued a White Paper on this subject, and that it is very desirable, from the point of view of the trade, that the attitude of the new Government should be made clear.

Mr. F. Beswick: Although the President says that these are very complicated matters, is he not aware that his predecessor gave an undertaking that action would


be taken, and, if that undertaking could be given then, why can it not be given now?

Dry Batteries (Price Control)

Mr. George Craddock: asked the President of the Board of Trade if he will re-introduce price control of dry batteries so that many old people and others without electricity supply in their homes are not disadvantaged by comparison with those who already have this service.

Mr. P. Thorneycroft: No, Sir. Supplies of batteries are adequate, and there is no reason to think that control would result in lower prices than those now being charged.

Motor Cycles and Cars (Hire Purchase)

Mr. A. Blenkinsop: asked the President of the Board of Trade why his Regulations require the purchaser of a motor cycle by hire purchase to make his repayments over a shorter period than the purchaser of a motor car.

Mr. P. Thoneycroft: I would refer the hon. Member to the reply given to my hon. Friend the Member for Wycombe (Mr. W. W. Astor) on 26th February.

Mr. Blenkinsop: Is the right hon. Gentleman aware that this discrimination imposes quite severe hardships on many constituents of mine, and, I am sure, on those of other hon. Members, who use motor cycles to get to work which is of real national importance?

Mr. Thorneycroft: I am familiar with the argument, and I hope to make an announcement shortly.

Industrial Estate, Kilwinning

Mr. Manuel: asked the President of the Board of Trade what plans he has for the location of more industries within the industrial estate at Kilwinning.

Mr. P. Thorneycroft: Many industrial developments have taken place in the Kilwinning—Kilmarnock area in recent years and it was decided by the previous Government to defer further building on the Kilwinning industrial estate and to hold the available land in reserve for possible future development. The shortage of steel and the need to restrict

capital investment are such that I do not think I would be justified at the moment in reversing this decision.

Mr. Manuel: Is the right hon. Gentleman aware that my constituents in the borough and in the local district of Kilwinning have grave fears about future unemployment? Is he further aware that between the wars this was a distressed area and is now listed as a development area? Is he still further aware that Kilmarnock is a long distance from Kilwinning, and that this answer is the result of having a British Minister for Scottish Questions who does not even know the geography of the area he is talking about?

Mr. Thorneycroft: I am at least aware of some of the propositions which the hon. Gentleman puts forward. I have not said that the matter is outside consideration. I have said it was deferred by the previous Government and that for the moment I do not propose to reverse that decision.

Mr. Ralph Assheton: Will my right hon. Friend continue to bear in mind the interests of Lancashire?

Cuban Sugar (Freight Tax)

Mr. Dodds-Parker: asked the President of the Board of Trade whether he is aware that, since the sugar agreement with Cuba in 1951 to purchase 1,500,000 tons of Cuban sugar over a three-year period, the Cuban Government has continued to levy a freight tax of 6⅓ per cent. of the gross freight on all shipments of sugar to the United Kingdom; and what expenditure in dollars has been incurred so far to meet this freight tax.

Mr. P. Thorneycroft: I understand that this tax is a revenue tax levied on all exports irrespective of destination. It is a combination of taxes on income and on freight and passenger fares which date back to 1928 and 1932 and have been several times increased, and it has no particular relevance either to sugar or to the Anglo-Cuban Trade Agreement. My right hon. and gallant Friend the Minister of Food estimates at 364,789 dollars the element in the freight charges for our purchases of Cuban sugar which is attributable to this levy between 10th August last, the date of the trade agreement, and the 29th February, 1952.

Mr. Dodds-Parker: In view of this new tax—I think my right hon. Friend agrees that it is a new one—and the dollar cost of loading sugar, would the Minister consider doing all possible to switch our purchases of supplies of sugar to non-dollar sources, particularly from the Commonwealth and Empire?

Mr. Thorneycroft: This is not a new tax; it has been on for a very long time.

Australia (Import Restrictions)

Mr. W. A. Burke: asked the President of the Board of Trade what action he proposes to take in order to mitigate the drastic effects on the Lancashire cotton trade of the import cuts proposed by the Australian Government.

Mr. P. Thorneycroft: For balance of payments reasons which Her Majesty's Government in the United Kingdom fully understand, the Australian Government have found it necessary to restrict imports of cotton textiles and many other goods to the level of 20 per cent. of the imports during the year July, 1950, to June, 1951. These restrictions must, I regret to say, increase very seriously the difficulties with which the cotton industry in Lancashire is already faced. I am confident that the cotton industry will do its utmost to offset the effect of these restrictions by increasing their exports to other markets. I know the difficulties of doing this at the present time, and I am in constant touch with the Cotton Board on the subject.

Mr. Burke: Does the Minister's reply mean that the Government have really done nothing and do not intend to do anything? Does not the Minister realise that this was our best Dominion market, that we have lost £26 million, and that on top of the Japanese menace this is a staggering blow to Lancashire? Markets once lost cannot be recovered.

Mr. Thorneycroft: I have not sought in my reply to under-estimate the effect of this particular Australian cut upon the textile industry of Lancashire.

Mr. Walter Fletcher: Will not my right hon. Friend undertake to make representations to the Government of Australia who may not have been fully aware of the crippling blow which this represents not only to Lancashire textiles, but to many other industries as well? Does he realise

that everybody concerned believes that if he made firm representations to Australia it would have some effect?

Mr. Thorneycroft: We are in discussion with the Australian Government about some aspects of the administration of these cuts, into which I cannot go in full detail in question and answer, but I hope to have an opportunity of saying something about it a little later on.

Mr. Douglas Jay: Though we well realise the necessity for the Australian Government to cut down their balance of payments deficit, did not the British Government at the Commonwealth Conference in January try to arrange that imports from outside the sterling area should be the ones selected for the cuts rather than those doing most harm to this country?

Mr. Thorneycroft: Clearly, from the United Kingdom's point of view, it would be much more satisfactory if cuts could be imposed on goods other than those from the United Kingdom. But as the hon. Gentleman is aware, the situation in Australia was such that some sharp decline in United Kingdom exports to that country was inevitable.

Mr. Jay: But did not we make that point in January to the Australian Government?

Mr. Thorneycroft: The arrangement with the Australian Government was set out fully in the communiqué issued at the time which set out the objective of each country in the Commonwealth and the Commonwealth as a whole as regards balancing its account, and left it to the individual countries to decide the best way in which to achieve that end.

Mr. Shepherd: Does not my right hon. Friend appreciate that the industry in Lancashire really requires representations in respect of a much wider field than merely on the administrative machinery involved, and will he reconsider his attitude on this question?

Mr. Thorneycroft: I am in contact with the Cotton Board on this matter.

Mr. Burke: I beg to give notice that in view of the unsatisfactory nature of the reply, I shall raise the matter on the Adjournment. [Laughter.]

Mr. Sydney Silverman: I note the general amusement in the House. It will not be shared in Lancashire. The other day—

Mr. Speaker: I take it that the hon. Member is speaking to a point of order?

Mr. Silverman: Yes, Sir. The other day I asked your leave to ask a Question about this subject by Private Notice. I was refused leave on the ground that Questions would be asked about it today, that I ought not to anticipate them, and that I should have my opportunity today. Am I entitled to have an opportunity now? My constituency is more closely affected than anybody else's in the House.

Mr. Speaker: I had the hon. Member in mind and I remembered his efforts to ask a Question. I should have called him but for the fact that notice has now been given that the matter will be raised on the Adjournment, and therefore we cannot pursue it further at Question time.

Mr. Nabarro: asked the President of the Board of Trade how many motor vehicles of all descriptions, and what percentage of United Kingdom vehicles exports, were exported to Australia during the 12 months ended 29th February, 1952: what is the anticipated reduction in such exports during the next 12 months consequential upon the decision of the Australian Government to curtail drastically their imports from the United Kingdom; and how far these changed arrangements will influence supplies of vehicles for the home market.

Mr. P. Thorneycroft: In the twelve months ended January, 1952, 171,000 motor vehicles, including tractors, were exported to Australia. This was 27 per cent. of United Kingdom exports to all countries. Details of exports in February are not yet available.
Until we have further information, we cannot estimate the probable reduction in exports over the next twelve months as a result of the import restrictions imposed by the Australian Government. It will, however, be substantial.
As regards the last part of the Question, this is a matter for my right hon. Friend the Minister of Supply.

Mr. Nabarro: In the light of my right hon. Friend's figures, is it correct to

assume that the reduction in the number of vehicles going to Australia in 1952 will be no fewer than 130,000? Can he say what special measures are in hand to place this very large number of vehicles either in overseas markets or on the home market, and what the policy will be in that regard?

Mr. Thorneycroft: My hon. Friend, of course, will appreciate that conversations are at present going on between my right hon. Friend and the motor car industry on these matters.

Mr. Maurice Edelman: During these balance of payments difficulties will the right hon. Gentleman concentrate upon improving export facilities rather than taking the easy way out of encouraging manufacturers of motorcars to release their cars to the home markets?

Mr. Thorneycroft: That is a question that should be addressed to my right hon. Friend the Minister of Supply.

Mr. G. R. Strauss: Does the right hon. Gentleman not agree that it will be practically impossible for the motorcar industry to export a similar number of cars to any other part of the world during the coming year?

Mr. Thorneycroft: I would not underestimate the difficulties of this cut, caused by balance of payment difficulties, and its impact upon the motorcar industry.

Mr. Godfrey Nicholson: I am sure that my right hon. Friend does not underestimate the feeling in all parts of the country in connection with the actions of the Australian Government. Will he assure the House that these questions are not taken up piecemeal but that representations are made on the highest level to the Australian Government on the harm they are doing to this country and to the whole structure of inter-Commonwealth trade?

Mr. Thorneycroft: I, of course, do not answer here for the Australian Government; but my hon. Friend will appreciate that in the balance of payments position in which they found themselves very considerable action in the way of reducing imports was inevitable.

Mr. Jay: Can the right hon. Gentleman say whether the British Government made


any specific protest to the Australian Government about the detailed nature of these cuts before they were made?

Mr. Thorneycroft: It is not a question of protests being made. At the present moment discussions are in progress between us and the Australian Government as to the details of the cut and the administration of their application.

Mr. Jay: But were representations made before these cuts were announced?

Mr. S. Silverman: Is not the House to understand from the whole trend of the right hon. Gentleman's answer that the representations he has made to the Australian Government are concerned only with the details and the administration of an 80 per cent. cut which in principle he apparently accepts? Will the Minister tell the House quite frankly what advantage he anticipates the sterling area as a whole will derive if Australia manages to balance its overseas account by driving the whole of Midland heavy industry and the Lancashire cotton industry into permanent bankruptcy?

Mr. Thorneycroft: These are large issues with which I hope to have an opportunity of dealing this afternoon.

Mr. W. Fletcher: asked the President of the Board of Trade to what extent exports authorised under existing contracts are affected by the import restrictions announced by the Australian Government on Saturday.

Mr. P. Thorneycroft: I recognise that the sudden imposition of import restrictions must cause difficulties for traders with firm orders, but I understand that goods already in transit or covered by irrevocable letters of credit will be allowed in and debited against a future quota. I am sure that the Australian authorities are fully conscious of the desirability of allowing bona fide contracts to be carried out. But evidently the Australian Government consider that to do so would frustrate the purpose of the import restrictions. I understand, however, that the Australian authorities will examine sympathetically cases of special hardship which may arise from the cancellation of contracts.

Mr. Fletcher: Is my right hon. Friend aware that this unilateral cancellation of existing contracts, entirely

against the example set by the Chancellor of the Exchequer, who has undertaken to issue licences for existing contracts, is the greatest possible blow at the whole export drive of this country, as it leaves the exporter in complete uncertainty whether the contract is good or not?
Will he remember that when similar action was taken in regard to Canadian contracts by the party opposite, we as a party made the strongest possible protest? Will he, therefore, go even further than he has done already and represent to the Australian Government that unilateral cancellation of contracts must not be allowed to go through without the strongest possible protest?

Mrs. Castle: Is it not ludicrous that individual members of the Commonwealth should be trying to solve balance of payments difficulties by cutting each others' throats? Is it not clear that we are in danger of entering on a world-wide recession of trade if this kind of unplanned trade anarchy goes on? Would it not be possible—I suggest it seriously to the right hon. Gentleman—to recall the Commonwealth Conference to work out a constructive and sensible economic policy?

Mr. Thorneycroft: I think the hon. Lady will do well to study—as I am sure she has studied in the past—what exactly was the balance of payments situation of the Australian Government when they decided on these cuts.

Dr. Barnett Stross: Is the President of the Board of Trade aware that there is a geographical area called North Staffordshire where from time immemorial the manufacture of pottery has been a specifically specialised field? Would he bear in mind the type of hardship that may ensue there as a result of these decisions, and look specially into the difficulties on that area?

Sir Ian Fraser: Is my right hon. Friend aware that unhappily in Australia, as in some other Commonwealth countries, they are in fact over-bought in many lines and that therefore if their Government had not found it necessary to place these painful restrictions on trade there would have been a natural falling-off of trade due to their being over-bought?

Mr. Speaker: That is another question.

Miss Burton: asked the President of the Board of Trade whether Her Majesty's Government will make arrangements for obtaining alternative markets for such British cars as were formerly exported to Australia.

Mr. P. Thorneycroft: I will certainly do my best to help the motor industry to find outlets in other countries for the trade affected.

Miss Burton: Does the right hon. Gentleman realise that in the Midlands, and certainly in Coventry, we shall have skilled engineers thrown out of work as a result of this import cut? Will he therefore impress upon motorcar manufacturers that, as export is second only to defence, something must be done about the matter?

Sir H. Williams: Is the right hon. Gentleman aware that last week the hon. Lady was trying to stop people from buying motorcars?

Mr. S. Silverman: Having regard to the numerous questions asked him from both sides of the House, does the right hon. Gentleman consider that what has taken place, and the Government's acquiescence in it, is what the Conservative Party has always meant by "Imperial Preference"?

Miss Burton: On a point of order. Might I ask if the hon. Member for Croydon, East (Sir H. Williams), is in order? I am sure that he said it quite honestly; but he alleged that I said something which I did not say. Last week I did not, as the hon. Member declares, try to stop people from buying motorcars. I tried to stop them from buying one car a year when other people could not buy a car at all.

Mr. Speaker: That is what I understood the hon. Lady to say. I did not take the hon. Member's remark very seriously.

Lead

Major Guy Lloyd: asked the Secretary for Overseas Trade, as representing the Chancellor of the Duchy of Lancaster, what efforts have been made by his Department to obtain lead from Australia.

The Secretary for Overseas Trade (Mr. Henry Hopkinson): The Ministry of Materials is in close touch with the

Australian lead producers. During the last two years this country has obtained more than two-thirds of its virgin lead from Australia. This represents approximately 70 per cent. of Australia's total lead exports.

Timber Supplies

Mr. Nabarro: asked the Secretary for Overseas Trade, as representing the Chancellor of the Duchy of Lancaster, what is the current position on stocks of softwood timber for housebuilding in the year 1952; and if he will give an assurance that adequate supplies are available in merchants' hands and elsewhere in the United Kingdom to meet all foreseeable demand for 1952 housebuilding arrangements.

Mr. Hopkinson: Present stocks of softwood are the highest since the war; and, together with authorised imports, they will provide enough softwood for the 1952 housing programme.

Mr. Nabarro: Will the hon. Gentleman give due recognition to the fact that the stock of softwood in the country, to meet the party's housing programme, is a direct result of the initiative displayed by private importers?

Mr. G. Williams: asked the Secretary for Overseas Trade, as representing the Chancellor of the Duchy of Lancaster, if he will increase the supply of wood for making non-returnable cases for horticultural use.

Mr. Hopkinson: Hardwood and plywood are fully available for cases of any kind; but as far as softwood is concerned, I regret that none can at present be allowed.

Mr. Williams: Will the hon. Gentleman bear in mind that our horticulturists are very good horticulturists, but they cannot compete with foreigners on fair terms if they are unable to supply decent boxes of the kind used by foreigners.

Mr. Hopkinson: I am well aware of the views of the industry, and when more softwood is available we shall bear it in mind.

Mr. W. M. F. Vane: Is the hon. Gentleman aware that there is an ever-increasing amount of softwood in small sizes now available mainly but not wholly from the Forestry Commission's young plantations,


and much of that now burned as firewood could be cut into boxwood, for this purpose, if only many more local sawmills had the requisite machinery? Will he look into the position again?

Oral Answers to Questions — EMIGRATION

Mr. Sparks: asked the President of the Board of Trade if he will state the number of British emigrants each year for the past five years and the countries to which they have emigrated.

Mr. P. Thorneycroft: As the answer contains a large number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Mr. Sparks: Will the Minister say whether it is now the policy of the Government to encourage the maximum emigration of skilled workers from this country to the Colonies and the Dominions?

BRITISH EMIGRANTS FROM THE UNITED KINGDOM IN THE YEARS 1947–1951


(Travelling direct by sea to countries outside Europe and the Mediterranean area)


Countries of future permanent residence
1947
1948
1949
1950
1951


Total all countries
…
121,643
157,290
144,503
130,238
150,774


Commonwealth countries
…
98,000
133,315
124,817
112,934
132,988


West Africa
…
—
—
5,675
3,503
2,693


South Africa
…
 26,142
27,726
11,367
6,537
6,975


Southern Rhodesia
…
4,506
3,916
2,783
4,241


East Africa
…
—
—
4,124
3,866
4,186


India and Pakistan
…
10,370
4,000
4,780
4,726
5,268


Malaya
…
—
—
5,242
5,547
7,306


Australia
…
13,012
34,445
53,059
54,184
56,724


New Zealand
…
5,918
6,927
9,261
10,562
9,719


Canada
…
22,960
34,487
20,762
13,434
27,544


British West Indies and Bermuda
…
—
—
2,418
1,518
1,642


Other Commonwealth countries
…
19,598
21,224
4,213
6,274
6,690


Foreign countries
…
23,643
23,975
19,686
17,304
17,786


United States of America
…
18,555
19,600
16,237
11,400
12,565


Central and South America
…
5,088
4,375
1,221
1,187
1,174


Other Foreign countries
…
2,228
4,717
4,047


Notes:—


1. The figures relate to persons who have expressed the intention of taking up residence in the country for which they have embarked for a period of one year or more.


2. For 1947 and 1948, West Africa, East Africa, Malaya, British West Indies and Bermuda are included under "Other Commonwealth countries".


3. Ceylon is included under India and Pakistan for 1947 and under "Other Commonwealth countries" for the other years.


4. Burma is included under "Other Commonwealth countries" for 1947 and under "Other Foreign countries" for the other years.

Mr. Godfrey Nicholson: Can my right hon. Friend say whether the figures show a general upward trend?

Mr. Thorneycroft: Yes, there is an increase. There is a large variety of countries, and it is not easy to summarise them in a short answer.

Following is the answer:

The numbers of British emigrants travelling direct by sea from the United Kingdom to places outside Europe and the Mediterranean area in the last five years were as follows:


Year




Number


1947
…
…
…
…
121,643


1948
…
…
…
…
157,290


1949
…
…
…
…
144,503


1950
…
…
…
…
130,238


1951
…
…
…
…
150,774

The following table gives such details as are available of the destinations of these emigrants:

Oral Answers to Questions — HOTEL, LONDON (BUILDING LICENCE)

Mr. Dodds: asked the President of the Board of Trade if a decision has yet been reached in the application for permission to build a £2,500,000 hotel in London.

Mr. P. Thorneycroft: This matter is still under consideration.

Mr. Dodds: How long will it be before a decision is reached, as this was being considered in December? Can the right hon. Gentleman say whether the interests concerned are British or not? If another nationality is concerned, will he say which it is?

Mr. Thorneycroft: The object of this project would be to increase our dollar earnings. It is, in many ways, an admirable project, and I am giving it most earnest consideration.

Oral Answers to Questions — DOMESTIC ANIMALS (ILL-TREATMENT)

Mr. Donald Chapman: asked the Secretary of State for the Home Department how many successful and unsuccessful prosecutions for ill-treatment of domestic animals were made in 1951, or the latest convenient period of one year: whether his attention has been called to the number of additional warnings issued to offenders by the Royal Society for the Prevention of Cruelty to Animals; and whether he will draw the attention of magistrates to their powers of imprisonment in cases of proved ill-treatment.

The Secretary of State for the Home Department (Sir David Maxwell Fyfe): The criminal statistics do not distinguish between offences of ill-treatment of domestic and other animals. During the 12 months ended 30th September, 1951, 1,012 persons were charged with offences of ill-treatment, of whom 869 were convicted. Of these 26 were sentenced to imprisonment. I have no reason to think that magistrates are unaware of their powers.
I have no knowledge of the circumstances in which warnings were given by the R.S.P.C.A. to persons who were not charged with an offence.

Mr. Chapman: Is the Home Secretary aware that the R.S.P.C.A. is now issuing, every year, something like 11,000 oral warnings, in addition to many other kinds of warning, to people who ill-treat animals? Is he further aware that a man who beats a dog to death with a crowbar is fined a miserable £7? Is he satisfied that the magistrates are really using their powers of imprisonment to try to stamp out this sadism in our national life?

Sir D. Maxwell Fyfe: I have no reason to think that magistrates are unaware of their powers. I should also like to say, as I have said on so many other occasions, that I am not going to be a party to the Executive giving directions to magistrates as to how they should do their work. I think that magistrates, who have the whole facts of each case before them, can best decide the appropriate penalty. Much as I regret—as does everyone in the House—the existence of these offences, I am not going to depart from that principle. On the other hand, the raising of the point by the hon. Member for Northfield (Mr. Chapman) and the obvious unanimity of feeling against these offences will go out from this House to the country.

Miss Irene Ward: As a magistrate, may I ask my right hon. and learned Friend whether he is aware that I think the maximum sentences which can be imposed are too light and that they should be raised? Will he please consider this question from the point of view of a magistrate?

Sir D. Maxwell Fyfe: rose—

Mr. Speaker: Mr. Ian Harvey.

Miss Ward: On a point of order. May I have an answer?

Mr. Speaker: I thought the hon. Lady was conveying information rather than asking for it.

Miss Ward: I did see my right hon. and learned Friend rise; so he evidently did not think I was conveying information. Might I have an answer to my question?

Sir D. Maxwell Fyfe: Further to that point of order. I should like to assure the House that all the words of wisdom which proceed from my hon. Friend are duly noted by me.

Mr. Chapman: On a point of order. In view of the unsatisfactory nature of the reply, I beg to give notice that I propose to raise the matter on the Adjournment.

Oral Answers to Questions — CIVIL DEFENCE (REGIONAL COMMISSIONERS)

Mr. Ian Harvey: asked the Secretary of State for the Home Department whether he will make a statement with regard to the appointment of regional commissioners.

Sir D. Maxwell Fyfe: A regional organisation already exists for peacetime Civil Defence purposes and it is so organised that it can be expanded to the necessary extent in the event of war. In present circumstances it is not considered necessary to appoint regional commissioners.

Oral Answers to Questions — WILD BIRD PROTECTION ACTS

Major Tufton Beamish: asked the Secretary of State for the Home Department on what date he received the Report of the Committee which advises him on the administration of the Wild Bird Protection Acts of 1890 and 1933; and what prospect there is of new legislation, in view of the fact that these Acts are badly in need of revision.

Sir D. Maxwell Fyfe: The Committee's proposals for new legislation were submitted on 24th September, 1951. At present I can only say that there will not be time for legislation on this subject this Session.

Major Beamish: Will my right hon. and learned Friend bear in mind that there is a real need for amending legislation and that it would be very pleasant, at this time of so much political controversy, to discuss wild birds during a short breathing-space.

Oral Answers to Questions — MURDER CONVICTION, INQUIRY

Mr. S. Silverman: asked the Secretary of State for the Home Department whether he has reconsidered, in the light of the further representations made to him, the case of Walter Graham Roland;

and whether he will order an inquiry to see whether this is not a grave miscarriage of justice.

Sir D. Maxwell Fyfe: I have been very carefully into this case. I am satisfied that there was no miscarriage of justice and that there is no need for further inquiry.

Mr. Silverman: Will the right hon. and learned Gentleman bear in mind that in spite of his opinion—to which all who know him pay considerable respect—there is a large body of opinion which is not without experience in this matter and which considers that this is an established case of the execution of a perfectly innocent man? Does he not appreciate that while experienced opinion holds that view, it is in the interests of everybody concerned in this case to have a proper inquiry, to examine whether or not there is anything in it?

Sir D. Maxwell Fyfe: Although I entirely appreciate the interest and attention which the hon. Member has given to this case, it is my responsibility to decide the point. I have given the gravest consideration I can to it, and I have arrived at the conclusion about which I have told the House.

QUESTIONS TO MINISTERS

Captain Duncan: On a point of order. May I draw your attention, Mr. Speaker, to the fact that once again Questions to the Ministry of Agriculture have not been reached? I think I am right in saying that Questions to that Department have not been finished, even if they have been reached, for nearly three months, whereas yesterday Questions to the Ministry of Labour were reached for the second time in one week. Will you, Mr. Speaker, through the usual channels, make arrangements so that Questions to the Ministry of Agriculture revolve, as do Questions to the Ministry of Labour?

Mr. Nabarro: Further to that point of order. May I draw your attention, Mr. Speaker, to the fact that, because the Minister of Agriculture does not rotate, statistics show that during the last 12 months one Question in four is all that has been taken orally? In view of the interest of agricultural Members in these affairs, can you, Mr. Speaker, persuade the Minister to rotate?

Mr. Speaker: I have no doubt that that is a matter which will be turned round in the mind of the Government, and a satisfactory conclusion reached. I must point out that, while yesterday we did 67 Questions, today we have done only 43. There were far more supplementaries today, and they were of greater length.

BUSINESS OF THE HOUSE

Mr. C. R. Attlee: May I ask the Leader of the House the business for next week?

The Minister of Health (Mr. Harry Crookshank): The business for next week will be as follows:
MONDAY, 17TH MARCH—Conclusion of the general debate on the Budget Resolutions.
TUESDAY, 18m MARCH—Supply [6th Allotted Day].
It is proposed to move Mr. Speaker out of the Chair on Air Estimates, 1952–53, and to consider Votes A, 1, 2, 7, 8, 9, 10, 11, and Air Supplementary Estimate 1951–52, in Committee.
WEDNESDAY, 19TH MARcH—Supply [7th Allotted Day].
Committee stage of Civil Supplementary Estimates, beginning with:
Class IX, Vote 17 (Tin).
Class I, Vote 27 (Scottish Home Department).
All Votes in Class VI and Class II.
At 9.30 p.m. the Question will be put from the Chair on the Vote under discussion and on all outstanding Estimates and Supplementary Estimates required before the end of the financial year.
Consideration of Motion to refer:
Rating and Valuation (Scotland) Bill to the Scottish Standing Committee for Second Reading.
Report and Third Reading:
Hydro-Electric Development (Scotland) Bill.
Metropolitan Police (Borrowing Powers) Bill.
THURSDAY, 20TH MARCH—Report stage of the Budget Resolutions.
Committee stage:
Export Guarantees Bill.
Cinematograph Films Production (Special Loans) Bill.
Report and Third Reading:
Miners' Welfare Bill.
FRIDAY, 21ST MARCH—Consideration of Private Members' Motions.

Mr. Ede: Has the Leader of the House given any consideration to the business for today and to the number of Prayers which, as a result of the matter we discussed last night, must be taken tonight if they are not to become time-expired? On the assumption that the Prayers relating to hire-purchase and those relating to transport can be taken in two separate groups, may I ask him this question: if it is agreed not to take the others tonight, and we put down a Motion regretting the action of the Minister concerned in raising the prices which are raised by the Orders with which the Prayers are concerned, will the right hon. Gentleman agree to put down a Motion for the suspension of the Ten o'Clock Rule one night so that such a Motion as I have suggested could be considered?
It will be understood that this arises from the occurrence last night, which, I think, found both sides of the House completely surprised by what had happened, and it would not be regarded as a precedent for future occasions.

Mr. Crookshank: Yes, Sir. As I said last night, I am quite prepared to try to meet the convenience of the House. Several right hon. and hon. Gentlemen put down Prayers and found themselves in a difficulty for which they had no responsibility. I should be very glad to accede to what the right hon. Gentleman has suggested—that is, provided the Chair permits, that there should be these two debates tonight, the first debate on the first and second Prayers together and the second debate on the third, fourth and fifth Prayers, each debate dealing with one of those two topics.
For the rest, and concerning the right hon. Gentleman's question about the possibility of putting down a Motion covering the ground in question, but not the actual Prayers—because some of them


would be time-expired—I certainly agree that, if the Opposition put down a Motion to that end, the Government would be quite prepared, on a suitable day, which could be discussed through the usual channels, to suspend the Rule for the purpose of debating it. I agree that we ought not to regard this as a precedent. I doubt whether the circumstances which gave rise to this problem will be repeated, in any case. I certainly hope not.

Mr. Ernest Davies: When does the right hon. Gentleman propose to find time for a debate on the Motion which stands on the Order Paper in my name, and in the names of some of my hon. Friends, about the rise in transport charges in London and those proposed for 1st May in the rest of the country?
[That this House views with grave concern the proposed increase in railway passenger fares on 1st May which will place an intolerable daily burden on the travelling public and calls upon the Minister of Transport immediately to review the finances of the British Transport Commission with particular regard to the position of British Railways with a view to taking any measures including State assistance which may be found necessary to prevent this further increase and to enable railway fares to be stabilised at a reasonable level.]

Mr. Crookshank: Not this week, but that is a matter which might be raised through the usual channels.

Lieut.-Colonel Marcus Lipton: Can the Leader of the House say when copies of the Housing Subsidy Bill are likely to be available to hon. Members?

Mr. Crookshank: I do not know.

Sir Herbert Williams: Is it proposed to amend the Standing Orders before we come to the Report stage of the Budget Resolutions so that we can resume the admirable pre-war practice of moving Amendments to Budget Resolutions?

Mr. Crookshank: It is not proposed to make any change in the Standing Orders this year, at any rate, owing to the very great shortage of available time.

Mr. F. Beswick: Would the right hon. Gentleman make quite clear that, in his answer to my hon. Friend the Member for

Enfield, East (Mr. Ernest Davies), he meant that although he cannot find time next week for the discussion of the Motion about railway passenger fares, he will find time for it in the following week?

Mr. Crookshank: Oh, no. I did not say anything of that sort. I said that there was no time next week, but that the question might be discussed through the usual channels. I was not promising any time.

Mr. Frederick Willey: May I tell the right hon. Gentleman, on behalf of my hon. Friends, that we are much obliged to him for the course he has taken over today's business? Am I right in assuming that when we have the discussion on the Motion we shall be able to cover the various points which we should have raised on the separate Prayers?

Mr. Crookshank: I am in the hands of the right hon. Member for South Shields (Mr. Ede), whose proposal it was, but I imagine that he will put down a Motion which will ensure that all the points of interest to the Opposition can be raised within the Rules of Order.

Mr. Ede: Does not the right hon. Gentleman think that the Motion will probably be wide enough if it expresses general condemnation on these grounds?

Mr. Nabarro: Has my right hon. Friend's attention been drawn to the fact that there are now arrears of debates for no fewer than six annual reports and accounts of the nationalised fuel and power industries, and that within a matter of eight weeks those arrears of six reports will become arrears of nine annual reports? Can he say when Parliamentary time will be found for the discussion of any or all of these reports?

Mr. Crookshank: I cannot. I must say that I cannot accept the word "arrears" in this connection, but if there is a general desire that these matters should be discussed, no doubt it can be raised through the usual channels. I must repeat, however, that in the immediate future Parliamentary time is very congested.

Mr. Philip Noel-Baker: I am sure the right hon. Gentleman recognises as does the House, how desirable it is that these reports should be debated. Does he realise that we have never yet had a


debate on the gas industry since it was nationalised? The last Government decided that some Government days should be given for this purpose. Can the present Government do that, too?

Mr. Crookshank: Not without notice.

Mr. Herbert Morrison: Surely it was the case, partly on the initiative of the then Opposition and partly on that of my hon. Friends, that we undertook that there should be not fewer than three days—I think it was—apart from the debate on the Second Reading of the British Transport Commission Bill and other occasions, upon which the House should discuss the nationalised industries. We were perfectly forthcoming about it, and the then Opposition were very insistent; if anything, they wanted more.
The same point arose about the increase in fares. We gave a day at the request of the Opposition so that they could be discussed. Now we are finding resistance, and I think the right hon. Gentleman, who used to be in this business of seeking more time for this kind of thing, is cutting a pretty sorry figure now, when he is not only not going further than the Labour Government went, but trying to go more backward.

Mr. Crookshank: I really cannot accept that. The right hon. Gentleman has no right to say he is getting resistance; because we are discussing at the moment only the business for next week. These wider issues are generally raised through the usual channels, so that discussion on them can take place to see how matters can be fitted in, to the general advantage. I have not said that there will not be any days at all. I said only that, without notice, I could not say how many there would be or when they would be. After all, the Parliamentary Session is not quite over yet.

Mr. Morrison: No, but the right hon. Gentleman is now saying that we should never on Thursdays consider anything but the business for the week following. We repeatedly did more than that in the last Parliament, and the present Prime Minister was misbehaving himself in wasting time on Thursdays over this business Question.

Lieut.-Colonel Sir Thomas Moore: Is it not the case that the Leader of the Opposition asked what was the business for next week? He did not ask what was the business for the next six months.

Mr. E. L. Mallalieu: Can the right hon. Gentleman say how soon we shall be able to discuss the Lisbon meeting resolutions?

Mr. Crookshank: I cannot say, because it is contingent upon the production of the White Paper asked for. [HON. MEMBERS: "Where is the White Paper?"] Perhaps I may be allowed to finish my answer to the question of the hon. and learned Member for Brigg (Mr. E. L. Mallalieu). The promised White Paper is at present in preparation, and my right hon. Friend hopes that it will be available to hon. Members during next week. After they have studied it, no doubt an appropriate day for debate can be discussed.

Mr. R. J. Mellish: Can the Leader of the House say when we can debate the Motion standing on the Order Paper in the name of my hon. Friend the Member for West Ham, North (Mr. Lewis) and myself, calling for a debate on the statement made to the House by the Minister of Housing and Local Government, which was misleading to the House, and the whole question of housing subsidies to local authorities? Can the right hon. Gentleman say when we can have a debate on those interesting subjects?
[In view of the promise made by the Minister of Housing and Local Government on 19th February, 1952, to this hon. ourable House, that the increase in the housing subsidy is guaranteed to cover the whole increased cost to local housing authorities of the new interest rates and the fact that the announced review of housing subsidies, made by the Minister to this House on 28th February, 1952, does not implement his promise, an humble Address be presented to Her Majesty praying that she may be graciously pleased to dismiss from office the Minister of Housing and Local Government.]

Mr. Crookshank: No, Sir.

Mr. Mellish: Why not?

Orders of the Day — WAYS AND MEANS

Considered in Committee [Progress, 12th March].

[Colonel Sir CHARLES MACANDREW in the Chair]

Question again proposed,

AMENDMENT OF THE LAW

That it is expedient to amend the law with respect to the National Debt and the public revenue, and to make further provision in connection with finance, so, however, that this resolution shall not extend to giving any relief from purchase tax otherwise than by making the same provision for chargeable goods of whatever description or by reducing the first, second or third rate of the tax generally for all goods to which that rate applies.

BUDGET PROPOSALS

3.44 p.m.

The President of the Board of Trade (Mr. Peter Thorneycroft): I think it will be for the convenience of the Committee if I indicate at the outset what is the range of the subjects I want to talk about. My speech can really be divided into two parts. I want to say, first of all, something about the Purchase Tax and the Utility arrangements, and what I propose by way of a new Utility scheme, both for the convenience of hon. Members who wish to intervene on the debate on that subject and also for that of the traders who are affected.
Second, I want to turn to the impact of the Budget on trade generally; to make reference to matters which we discussed earlier with relation to Australia, to Europe and to our export trade. I shall compress my remarks into as short a space as possible, but the Committee will realise that this is a rather wide range of topics to have to cover in a single speech.
Let me start with the question of Purchase Tax and Utility. I want to take the opportunity of explaining why it is that we want to tackle this problem at this particular time, and I shall seek to persuade the Committee that it was a problem which really would brook no further delay, and that the solution which we put forward is the right one. I do not think that anybody—and there are many

in all quarters of the House—who is familiar with this very complicated field of Purchase Tax, Utility, and price control would imagine that it was a simple matter.
The complexities, and the handicaps that go with them, are not the fault of anybody of this Government or the previous Government. They are due to the hard logic of events, and the attempts which have necessarily been made to adapt a system which was originally designed for limited purposes in war to the much broader and more expanding purposes of peace.
My predecessors at the Board of Trade were as conscious of these problems as I am. The ex-Chancellor of the Exchequer appointed a Committee under Sir William Douglas to inquire into them, and, I think, whatever view we hold about the issue, all of us would like to pay a tribute to the energy and care with which that Committee directed its mind to these difficult problems.
The Committee was certainly very well qualified to consider them. Among others, it included the General Secretary of the National Association of Unions in the Textile Trade, Mr. Heywood, who, incidentally, is also a member of the Cotton Board; and on the consumers' side there was Mrs. Allen, who is a prominent member of the Women's Cooperative Movement. This Committee, having gone into all these matters, arrived at a unanimous Report. I want to say at once that the Government, broadly, accept the verdict of that Committee. We intend to implement the remedy which it suggests.
I will now refer to three specific problems to which anyone who confronts this issue has to find some answer. One group of problems is concerned with our exports; another group is concerned with our imports; and a third is concerned with the standards of quality of the goods offered to consumers in this country—to the men and women who go into shops to buy articles.
I shall deal with the export problem first of all. It can be quite simply stated. It is that, under the old Utility scheme, an important range of goods, particularly in the textile field, were not made at all for various reasons. Some of them fell in what was the "blind spot" range, which is above the top Utility price,


where articles suddenly move into the sphere where they bear the whole weight of taxation. In such circumstances no one would buy them. Of course, in those circumstances, equally clearly, no one would make them.
Some others fell within the range in which, though they were comparable in price, they were excluded for technical reasons from the Utility scheme. There were new forms of fabric or new constructions which, for some reason or other, despite all the ingenuity of everyone who looked at them, could not be brought in. Certain types of the new rayon cloths fell into that category.
Recently, I was for a short time in Lancashire and Yorkshire. I was impressed by the weight of opinion which was expressed to me on these problems. I was satisfied that these were no imaginary complaints. It was—and I can say this quite fairly—it was the common view of everyone who spoke to me, whether employer, or whether a member of the trade unions, that something had to be done about this problem quickly—that the existing situation was frustrating and distorting the whole of the textile industry.

Miss Alice Bacon: Is the right hon. Gentleman not aware that he has received representations from the biggest firm not only in Yorkshire but in the country—Montague Burton Ltd.—that it is absolutely opposed to the abolition of the Utility scheme?

Mr. Thorneycroft: I am not saying that opinion is unanimous throughout the country on this matter at all. What I was saying was, and I repeat it, that when I visited Yorkshire and Lancashire a short time ago opinion was unanimous on the employers' side in the cotton and wool textile industry and on the side of the unions that something had to be done about the existing distortion and frustration of the textile industry, and it was put to me as, in their view, the most urgent problem which the President of the Board of Trade had to tackle.
The second group of problems concerns imports. For a fairly obvious reason it is not possible, with a few exceptions, to certify a large range of imported goods as Utility. In so far as the Utility specification concerns cost, nobody knows what was the cost of manufacture, and in so far as it is based on a construction

test, it is very difficult to say exactly what the construction was in the country of origin. Moreover, it would be a vast administrative task to try to categorise the whole range of articles imported into a great trading country such as this.
Since they were not Utility, they could not be tax free, and in the result, the British manufacturer had the tax advantage of either 33⅓ per cent. or 66⅔ per cent. That was a direct breach of nearly all our trading obligations; not just a direct breach of the General Agreement on Tariffs and Trade, but a direct breach of the spirit of every commercial treaty which we have ever undertaken or, indeed, are ever likely to undertake.
I may say, too, that if other nations treated us in the same way and had a discriminatory internal tax over and above the tariff they imposed on our goods, we should be the first to protest. Indeed, the previous Government are well aware of this. They twice, first on the 11th December, 1950, at Torquay, and, secondly, on the 20th September, 1951, at Geneva, pledged themselves in the most specific terms, quite rightly, to do away with this discrimination. These pledges, I emphasise, were not given by us but by our predecessors, and we intend, as they would expect us to do, to honour these pledges.
I say this now for this reason, that those who criticise, as they may, in debate the Report and suggestions of the Douglas Committee, and the suggestions which I will put forward to deal with that issue, must produce an alternative which will deal with this problem. It is not enough to criticise what we do unless one can find some other and better way of doing it at the same time. The solution which was put forward by the Douglas Committee, which will come into effect on Monday next, has already been described in essence by my right hon. Friend the Chancellor of the Exchequer.
Put very briefly, it amounts to this: that about half the goods which are manufactured in any particular category will fall into the Purchase Tax free group, and the remaining half, instead of jumping suddenly into a range where they bear the full rate of tax, will have a gradually increasing amount of tax upon the amount which they exceed the tax


free limit. This will, whatever can be said against it, have five substantial advantages.
First, it removes the tax discrimination against imported goods, as we are pledged to do. Second, it maintains a tax exemption for lower-priced goods. Third, it removed the "blind spot" to which I have referred. Fourth, it does to some extent reduce the tax differential between non-utility and the highest-priced Utility goods, such as exists between silk and rayon, and, fifth, it does avoid discrimination, which cannot be justified, between closely competing goods of equivalent value.

Mr. Frederick Lee: I follow the logic of that argument and agree that something has to be done about discrimination. But is it not the case that while the right hon. Gentleman's right hon. Friend is doing everything possible to limit the flow of imports into the country, the right hon. Gentleman's decision on imports now will help to increase the flow of imports, when the whole policy is to lessen the flow of imports?

Mr. Thorneycroft: I have been talking about increasing exports, but I shall have something to say later in my speech on the control of imports.
To return to the field I am in at this moment—I will not ignore the hon. Gentleman—I want to make five comments on the Purchase Tax position. The points I would make about it under this new scheme are as follow: first, that a number of articles which previously were excluded from any tax exemption whatsoever now get some tax exemption. That is to say, all the new fabrics which are coming along and which, for various reasons, cannot be bought within the Utility range and, therefore, bear the full weight of the tax, are, for the first time, given some degree of tax exemption.
Second, a number of articles were previously missed out altogether from the Utility range and the tax free range. For example, the agricultural worker has had to pay 33⅓ per cent. tax on rubber Wellington boots. A typical pair, selling now for 42s., will be relieved of the entire burden of the tax of 7s. 6d., which is quite substantial for an agricultural

worker. Third, this is not an increase in tax; it is a redistribution of tax.
I quite agree that in the redistribution of tax opinions can always honestly vary as to who is benefiting and who is being hurt. I would call the attention of hon. Members opposite to the views of the Douglas Committee on this matter—and remember that I did not appoint this Committee, it was appointed by them. The Committee said that in their view this scheme would not worsen and might well improve the position of the poorer sections of the community. That is the impartial opinion, not put forward by me, but by the Committee appointed by hon. Members opposite.
Fourth, while, on paper, some top grade Utility goods will bear tax, it is a good deal less than at first sight might appear. Take, for example, a man's three-piece suit with a top selling price of £14 9s. 2d. Theoretically, it would bear a tax of 26s. and sell for £15 15s. but the fact is that many of these suits are now selling for between £10 and £12, and a £10 suit bears a tax, under this scheme, of Is. I really cannot believe that that can be represented as a very harsh imposition.

Mr. John Paton: May I put this to the right hon. Gentleman? He has just cited a case that is exceptionally favourable to his own argument. What about the case of the shoe industry, with 98 per cent. of the total production now having to bear an absolutely new tax?

Mr. Thorneycroft: I must confess to the hon. Gentleman that I did cite that case in support of my own argument. I make no apology for that. I shall be taking an illustration from the boot and shoe industry for my next point.
Some critics of the scheme which I am putting forward assume, quite unwarrantably, that there was some justice or logic in the scheme which it replaces. But there was no logic or justice in the old scheme. As the Douglas Committee points out, the percentage of Utility supplies for different goods differed very widely; it was 50 per cent. for non-wool cloths and up to 98 per cent. for footwear.
The Douglas Committee said:
…the Utility schemes are not consistent as a means of providing tax exemption, even for these classes of goods, for the main body


of consumers in the lower income groups. It is clear, for example, that a large number of them are unable to buy non-wool dresses free of tax, whereas persons in the higher income groups are able to buy footwear free of tax. This is, in our view, a weakness of the present Purchase Tax Utility arrangements as a social measure to provide tax-free essentials for the lower income groups.
To tell the truth, I am not underestimating the difficulties which are created by any readjustment of this nature, but when we get Utility shoes up to about £5 a pair it is difficult to argue that those are essentially things which are normally bought by the lower income groups, and the advantage of the scheme put forward by the Douglas Committee is that it has brought the range of tax exemptions well within the range of goods normally purchased by those incomes.

Mr. G. R. Mitchison: Has the right hon. Gentleman considered the double effect of putting a new tax on the boot and shoe industry and of removing what was, in effect, a supplementary tariff? Has he considered the effect on employment in towns—there are many of them—which depend practically entirely on this industry and where employment is already uncertain? Has he also considered it the more having regard to the fact that, with that measure of supplementary protection and that measure of benefit under Purchase Tax, boots and shoes are already fairly expensive?

Mr. Thorneycroft: I have just made an observation about the cost of boots and shoes. However, the answer to the hon. and learned Gentleman is simple. It is that if we take this field as a whole—we must take it as a whole if we are to approach the subject at all—what we find is that no more tax is being collected than was being collected before. With regard to the general question of the budgetary effect generally on consumer industries, I shall have a word to say about that in the second part of my speech.

Mr. Mitchison: What about Kettering?

Mr. H. Rhodes: Is the right hon. Gentleman aware that the incidence of tax on boots and shoes will now bring in working men's boots and shoes which were previously free of tax?

Mr. Thorneycroft: It is true that in any re-arrangement of tax some goods will bear tax which did not bear tax before and some goods will be free of tax which previously bore it. The essence of the solution which is put forward is that, whatever view one holds about Purchase Tax, Purchase Tax should be divorced from the Utility Scheme. That factor is basic to any solution of the import and export problem to which I referred earlier.
I now come to the problem of what can be done about the Utility scheme as it exists today. The first thing that I would say about the Utility scheme as it exists today is that it has moved a very long way from where it started. It started with a few rigid specifications from well-known manufacturers' lines introduced in times of severe shortage and linked to price control and used on a sellers' market. In those circumstances it did enable consumers to know what they were buying and ensured, or helped to ensure, that they had some kind of value for money.
No one could suggest that the bulk of the old Utility scheme—I at once conceded that there are a few exceptions—today provides any guarantee of value for money. Anyone who reads the Report of the Douglas Committee with an objective outlook would agree with that. The Committee said:
Most of the Utility schemes no longer justify the faith which many people still have in them as providing a guarantee of quality or of value for money.
I emphasise once more that this is not my comment but a quotation from the Report of the Committee which was appointed by this Government's predecessors. The Report also says:
Far from offering any assurance of value for money, the wool apparel cloth Utility scheme may well deceive the uninformed consumer on this very point.
Therefore, the fact that this has happened is not the fault of those who have been managing these schemes. I see sitting opposite the hon. Member for Ashton-under-Lyne (Mr. Rhodes), who was responsible for administering a great many of these schemes and introduced a number of flexible specifications. If anybody wishes to accuse me of murdering the old Utility scheme, I should protest that I merely have the misfortune of being caught with the body. I have a very


able accomplice—I will not claim more than that—sitting on the benches opposite.
In these circumstances, I have had to consider what is the best course to take. I will say at once that I propose to leave furniture as it is. It was referred to separately by the Douglas Committee. It provides a greater degree of quality specifications than others, and, for various other reasons, I propose to accept the Report of the Committee and to leave it for the moment—for the moment only—as it is while I conduct an inquiry to see what is the best to be done for the future.
For the schemes other than furniture, I have taken the necessary steps to revoke the 118 Orders which govern the old Utility schemes and to prevent the misuse of the Utility mark after their revocation. The 1,500 or more pages of Orders and thousands of specifications will cease to have effect as from Monday next. The prices of goods other than furniture and nylon stockings will cease to be controlled. Price control is, in any event, ineffective as the goods are not scarce.
I agree, however, that if we are to wind up the old Utility scheme we must provide some safeguard for the future. I believe that the best safeguard is the standard of the manufacturers and workers in this industry working in a competitive system and seeking to meet the demands of the consumers.
At the same time I am anxious to preserve those parts of the old Utility scheme which provide any real form of safeguard. In place of those schemes, I propose that there should be a new and much simpler form of Utility scheme, narrower indeed in scope, at any rate to begin with, but one which within its limits will really mean something to the consumer.
It seems to me that the right approach lies along the lines suggested by the Douglas Committee in their Report. That was, that the Board of Trade should encourage industries to apply minimum standards, worked out in conjunction with the British Standards Institution, and that these should be combined wherever it was possible with the registration of certification marks which will enable the consumer to know which goods comply with the standards laid down.
In recent weeks I have been discussing these matters, with the trades most con-

cerned, to see how best it can be done. I am glad to say that I found among the industries themselves a real desire to see some such scheme put forward and a willingness to co-operate with the British Standards Institution. They agree that that is the right approach to it. The Institution, as all hon. Members who have been associated with it know, have an independent position and great experience of standards of all kinds in many different industries. Their constitution gives a place, not only to the technical and commercial experts, but also to the ordinary consumer.
The Institution have a very good Women's Advisory Committee associated with them. They are peculiarly well fitted for this task, and they have agreed to work out schemes on those lines. They have already a registered mark, which is becoming known as a guarantee of fitness for purpose for many kinds of consumer goods outside the technical field. Those who are accustomed to buy Utility goods will be glad of the assurance in the future that they are of British Standard quality. I like the term "British Standard."
The Institution have agreed to establish a range of British Standards (Utility Series) specifications for the purpose. I have received assurances from a number of trade bodies that they will at once proceed to devise with this Institution, specifications based on those Utility specifications which provide some guarantee of quality or performance for the consumer.
In particular, the cotton industry have told me that they propose within a few weeks to deal in this way with the most popular specifications, which cover a wide range of cotton cloths and household textiles up to about 75 per cent. of the trade in those particular types. For other cloths, the Cotton Board are seeing whether they can have some performance tests of one form or another. I make no apology to the Committee for recounting what these various industries propose to do, because it is of the greatest importance that we should safeguard the position in the future.
The British Rayon and Synthetic Fibres Federation have informed me that they will, as a matter of urgency and in collaboration with the Institution, devise


tests for such qualities as shrink resistance and colour fastness, and will make provision for the marking of cloths which comply with these tests.

Mr. Rhodes: Is the right hon. Gentleman aware that the Rayon Federation have been studying what to do with rainproof cloth for two years, and have not come to a decision? Will he say when they will come to a decision?

Mr. Thorneycroft: I will deal with that in a moment. They are working at this, and they have assured me that there is no difficulty in working out performance tests on the two matters I have referred to, which were not rainproofing, but I cannot make any other promises about other performance tests at present.
The Wool Textile Delegation have told me that they intend to proceed, in cooperation with the Institution, with arrangements which are already far advanced for the voluntary labelling of wool cloths to indicate their wool content. In addition, they intend to start discussions with the Institution forthwith to see whether they can work out standard tests for the strength of cloths for children's wear, which is something which should be encouraged, and for the shower resistance of raincoat cloths. I am adding this for the benefit of the hon. Member for Ashton-under-Lyne (Mr. Rhodes).
For many kinds of light clothing and children's wear there already exist British Standard specifications worked out by the trade, which have been incorporated in the old Utility schemes and for others, such as waterproofs and overalls, such standards will be issued shortly.

Mr. F. Beswick: Can the right hon. Gentleman say whether any control of profit margins will apply to these things?

Mr. Thorneycroft: No. I did say earlier—perhaps the hon. Member did not hear it—that except in the case of furniture and nylon stockings I propose to do away with price control for the very good reason that the control is exercised by the market conditions today, as many hon. Friends with friends in the textile industry know very well.

Mr. Thomas Price: I am following the right hon. Gentleman's speech with interest and not without a good deal of sympathy, if I may say so,

but is it intended, once these standards are laid down and adopted by the trade, to give the Institution no authority to prevent the abuse of this system by unscrupulous manufacturers?

Mr. Thorneycroft: I am coming to that point. In so far as they are licensed to use a certification mark by the licensor which will be the British Standards Institution, it would, of course, be actionable to abuse that mark. I am going to explore that point a little further in a few moments.
Today I was asked a question on the subject of bedding. There are already British Standard specifications in force relating to the cleanliness of filling materials and to hospital type mattresses, and the Federation have adopted a general code of practice which they are discussing with the Institution to see to what extent it can be embodied in British Standard specifications.
Coming to the point which was raised by the hon. Member for Westhoughton (Mr. T. Price), I propose next Session to introduce legislation to amend the Merchandise Marks Act. My purpose will be to widen the definition of trade description, which is at present limited to such things as weight, number, origin and material and to include other qualities within the compass of the Act. This will mean that it will become an offence to describe wrongly the qualities of an article, such as its waterproofness or resistance to fading, which will come into this wider definition. I hope that meets the point put by the hon. Member.

Mrs. Jean Mann: Would the right hon. Gentleman also include goods described as wool which do not contain wool?

Mr. John MacLeod: Can my right hon. Friend see his way to distinguish between hand-woven tweed and mill-woven tweed under this scheme?

Mr. Thorneycroft: I see that I am going to be under considerable pressure in this definition, and I hope the Committee today will not press me to define a wide range of textiles while standing at the Despatch Box.
For the future, many trade bodies have assured me that they will tackle this problem of improving and extending the


standards, which will be issued without delay through the British Standards Institution and by working out performance tests and in other ways.
Perhaps I must just summarise the situation at which we have now arrived. There are now considerable stocks of Utility goods in various stages of distribution and these, of course, will continue to be available for some months while the arrangements that I have indidated are being outlined and put into effect.
Broadly, the effect of my proposals is to place on industry, rather than on the Government, the main responsibility of giving to consumers an assurance about the quality of the products which they buy. It will remain the Government's task to stimulate and facilitate this work, but I think it can be more satisfactorily carried out by the voluntary organisation of the industry in the way that I have described rather than by a mass of Statutory Instruments.
The public, too, can help themselves by demanding in future goods made in accordance with British Standards and bearing a certification mark, as they have in the past demanded goods bearing the Utility mark. Indeed, the public will be the deciders in this matter. If the public demand a certain mark I am quite certain that the manufacturers will be prepared to put that mark upon the clothing. I shall welcome suggestions and assistance from all concerned that will help us to make progress on these lines. I share the conviction expressed by the Douglas Committee when they said that
Arrangements of this kind could give the consumer far more satisfactory assurances about quality than the present Utility schemes provide.
Perhaps I might summarise my proposals up to this stage. I claim, first, that this scheme will help and encourage exports by removing those handicaps referred to as the "blind spot," that could not be corrected within the old scheme, and will encourage the inventiveness of this great industry and the introduction of new fibres, new fabrics and new methods of construction, which can be brought freely into the ambit of the proposals which I have put forward.
Second, it will enable our trade agreements to be kept. We are, after all, a

great trading nation and we above all should be concerned to be meticulous in carrying out the things that we have undertaken to do. Third, a range of articles for the lower income groups is preserved wider than has so far existed, in which no tax, or very small tax, is imposed. Fourth, a system of quality safeguards is introduced which, while it is narrower than numbers of specifications within the old Utility scheme, will provide a basis upon which a more comprehensive scheme can, with care and patience, be built up.

Mr. Martin Lindsay: My right hon. Friend has been very patient in face of interruptions and I am much obliged to him for giving way. Can he tell me whether his ingenuity has managed to find a way to get round the very real injustice which occurs when Purchase Tax is lowered after the retailer has aquired the goods and paid the tax?

Mr. Thorneycroft: The question which my hon. Friend is putting to me is whether I have solved the problem of the hardship upon a retailer when Purchase Tax is lowered and the retailers already hold stocks. The answer is that up to the present I have not found a satisfactory answer to the question: and I am not alone in that position.
Upon this aspect of the matter, all I would say, in conclusion, is that during the past months I have given many hours of very close attention to the problems which I have discussed. I am convinced that the proposals which were put forward in the Douglas Report are the right way of solving the particular problems with which that Committee were faced. I am satisfied that the new Utility scheme and the proposals which I have put forward this afternoon will provide, in microcosm, the same sort of approach as the Budget has to the rest of our affairs. It will ensure the welfare of those who really need help and it will ensure that help is of the kind which they really need.

Mr. George Chetwynd: Would the right hon. Gentleman repeat the guarantee that he has given before, that children's Utility clothing is completely free of tax?

Mr. Thorneycroft: Children's clothing does remain outside the tax.

Mrs. Mann: In the White Paper, the hoods of coat-sets under 42 inches are subject to tax. Does not that affect the little coat-sets that children are wearing today?

Mr. Thorneycroft: I dare say that the hon. Lady may be right. I must admit, quite frankly, that she has stumped me. I have tried to answer a number of the questions that were asked, and now I think that any further question might be developed in the course of the debate. I have already kept the Committee for some time and I have yet another important range of subjects with which I would like to deal.
I would like to turn to the impact of the Budget on our general trading position.

Mrs. Barbara Castle: Would the right hon. Gentleman—

Mr. Speaker: If the right hon. Gentleman does not give way, the hon. Lady must resume her seat.

Mr. Thorneycroft: If the hon. Lady has a question to put, I am sure she can put it later in the debate, and that my hon. Friend will answer it.

Mrs. Castle: The right hon. Gentleman will remember that I asked him specially to deal with a point in his speech, and I understood that he would. Might I ask him the question now, seeing that, apparently, he is not going to deal with it at all? In view of the fact that a large range of goods, up to now free of tax, is to come into Purchase Tax categories, can the right hon. Gentleman tell the House what he intends to do to meet the protests of those manufacturers who normally sell direct to retailers, and on whose selling price the Commissioners of Customs and Excise at present make a value uplift calculation for Purchase Tax purposes which increases the range of Purchase Tax by increasing the selling price?

Mr. Thorneycroft: The hon. Lady is raising a point of great substance. I fully appreciate it, but there is a whole range of complex questions connected with the uplift of wholesale prices, and I think they would be better discussed on the Finance Bill in the detail which they thoroughly deserve.
Now I will turn to the impact of the Budget on our trading position. The right hon. Member for Leeds, South (Mr. Gaitskell), accused my right hon. Friend of talking with rather different voices at the beginning and at the end of his speech. I am bound to say that the right hon. Gentleman himself led almost a Jekyll and Hyde existence during the course of his speech. He started off by indicating that he was, on the whole, rather worried that we had not been tough enough and towards the end he wanted larger social benefits without, as I understand, being prepared to take the food subsidies off. I am not criticising the right hon. Gentleman when I say that it is the essence of a good commander to attack on both flanks at once, and the right hon. Gentleman certainly did that.
Whatever else can be said about the Budget of my right hon. Friend, it certainly is a substantial step forward on the path of realism. A sense of realism has been sadly lacking in both our internal and external trading affairs. During the past few years the prices which we have had to pay for our vast quantities of food imports have been rising under the stress of world demands upon limited supplies. The food subsidies, whatever may be said about their social implications, did very much to disguise the realities of our world trading position from the people of this country.
It is—and I agree with this—the task of Government to seek to shield those who need to be shielded from the full force of adverse world-price movements, but it is one thing to defend the subsidies as a necessary means of providing protection to those who need it, and it is another to try to defend the granting of the same protection to those who manifestly do not need it.
It may be that in the latter part of the 20th century the millionaire and the navvy both have some claim upon our compassion, but the claim would be on different grounds and extended in rather different ways.

Mr. M. Turner-Samuels: Why give the millionaire increased family allowances?

Mr. Thorneycroft: The Budget has made a substantial reduction in food subsidies, but it is obvious to anybody who


looks at the matter fairly that substantial measures have been taken to ensure that those who need protection will continue to be given it. It would be both perilous and absurd for the Government to try to cushion both rich and poor alike against the impact of reality.
I come now to what I find a very difficult aspect of the matter, and that is that realism at home must be matched by realism in our external trade. If there is one lesson which we should have learned in these latter years, it is that inflation at home and relatively free trading methods abroad go very ill together. The inflation sucks in great quantities of imports for which the means of payment in full are lacking, save by drawing upon ever more limited reserves, and then, in a desperate attempt to remedy the situation, the brakes are slammed on, quotas are applied, contracts are broken, and the whole machine moves forward in a series of gigantic hiccups. That is the system which we have inherited, and other countries besides ours have had the same experience.
That brings me, of course, directly to the question of the Australian import cuts. They have been a painful reminder from Australia in the past few days that the inflationary boom in Australia does not last for ever, and that when the end comes, it comes with a very sharp jolt. Those who favour the physical as opposed to the fiscal method might do well to study the Australian example. The Australian sterling reserves in London have fallen from about £840 million to £500 million in eight months. That was not so much because her earnings had fallen, but because her rate of import expenditure had risen from £850 million a year to £1,250 million a year.

Mr. T. Price: As a direct result of the boom in wool sales.

Mr. Thorneycroft: There was a boom in wool sales, which may have sent up the rate of buying.
The sterling area is a great, useful and powerful organisation, but no organisation yet devised by human ingenuity could permit any one of its members to live permanently beyond its income. As we supplied over 48 per cent. of Australia's imports we were bound to be the hardest hit when a halt was called to

that particular rate of spending. I suppose that no British Minister, with the exception, perhaps, of my right hon. Friend the Chancellor, is faced with greater problems that I am as a result of these import cuts, but I have no hesitation in saying that I applaud the Australian Government's decision to set its house in order. These measures are in pursuance of the agreement that each Commonwealth country should seek to achieve an overall balance.
All I want to do is to re-emphasise this lesson, that unless a country's internal economy is kept in balance the necessity for such sharp and sudden action through physical controls becomes overwhelming.

Mr. Hugh Gaitskell: Are we to understand, then, that it was agreed at the sterling area conference that Australia should make these cuts in U.K. imports?

Mr. Thorneycroft: That was not agreed. What was agreed at the sterling area conference was set out very fully at the time. It was that each sterling area country should seek to live within its means and balance its account, and that the whole sterling area itself should balance the account. It is not, of course, within the power of this country, and nor would it be right for this country to attempt, to dictate to any other member of the Commonwealth the way in which it should live within its income. These are sovereign countries, and they have the right to conduct their affairs in their own way, in accordance with the decisions of their own elected representatives.

Mr. Gaitskell: The right hon. Gentleman must not seek to evade his responsibility and the responsibility of the Chancellor for the failure of a conference by rhetoric of that kind. I should like to ask this question: Was it or was it not agreed at the sterling area conference that there should be discrimination against non-sterling imports? Perhaps I might be allowed to remind the right hon. Gentleman that the Chancellor, in reporting to us on this conference, told us—or certainly gave us the impression—that the whole idea was that we should, each of us, seek to exclude non-sterling imports. How can he really suppose that it will be possible for this country to get into balance if one sterling area country


after another cuts down imports from the United Kingdom?

Mr. Thorneycroft: It would be quite wrong to assume that sterling imports were the only imports which Australia cut.

Mr. Gaitskell: I did not say that.

Mr. Thorneycroft: I am sure the right hon. Gentleman did not mean to say that.

Mr. Gaitskell: I did not say it.

Mr. Thorneycroft: I do not want to misrepresent the right hon. Gentleman, as he knows. Australia cut other people's imports as well as ours, and that should be perfectly plainly said. It is not within the power of any one country in the Commonwealth to tell or to dictate to any other country in the Commonwealth how it shall live within its means.

Mr. Turner-Samuels: What was the agreement for?

Mr. Harold Wilson: Has the right hon. Gentleman made it clear to the Australian Government that when the roles were reversed a year ago, when we had a great deficit on our total balance of payments, and particularly on our balance of payments with Australia, we did not seek to cut down our imports from Australia into this country; and that we did not seek to start those sorts of things going within the Commonwealth? Furthermore, my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) and I both tried to bring home to the Australians at that time the need to control this inflation, and the need to prevent the situation which has since developed. Will the right hon. Gentleman not press that on the Australian Government?

Mr. Thorneycroft: The right hon. Gentleman is making a perfectly fair point. It is quite true to say that within the sterling area all of us would prefer that, in so far as cuts have to be made, they should be made outside the sterling area rather than within it. I entirely accept that point. At the same time, I think it fair to say that, looking at what Australia's position was and at the rate at which her sterling balances were runing down, she was coming to a stage where some slowing down in that process had to be put into effect.
I recognise, as everybody else in the Committee does, the harsh effect which those cuts have upon a whole range of British industries. I thought that Sir John Black hit the nail truly on the head when he commented, as reported in the press on Monday, that the Australia honeymoon was not going to last for ever; that British industry had relied too long on Australia to absorb a large proportion of its exports. The truth is that with or without Australian cuts, at the rate at which the sterling balances were being drawn upon, a very severe slowing up of British exports in the Australian market was inevitable.

Mrs. Mann: rose—

Mr. Thorneycroft: I have given way to the hon. Lady several times.
Our representative in Canberra is in close touch with the Australian authorities so that we may be clear, as soon as possible, about the precise manner in which it is intended to administer the cuts. The Australian authorities are conscious of the desirability of allowing bona fide contracts to be carried out, but it is obvious that, in general, the outstanding contracts are far in excess of the quotas which the Australian Government have fixed. I have reason to believe that Australia will deal as sympathetically as possible with special difficulties arising, for example, where goods are already in production and have been made specially for the Australian market so that they are not readily saleable elsewhere except at a severe loss.
There is one other point which I should mention, not only for the benefit of the Committee, but which I should like Australia to bear in mind. As a general rule, United Kingdom exports to Australia are not supplies against confirmed credits, whereas our competitors in other countries frequently demand such credits. Therefore, our goods may unintentionally be treated worse than imports from our competitors. I think that is a point which we ought to bring home to Australia, and I believe that their Government will consider this and other points which I and other hon. Members have mentioned as sympathetically as their balance of payments permits.

Mr. Walter Fletcher: Does my right hon. Friend realise that in what he has just said he has, in


effect, whether he intended it or not, more or less condoned the act of the Australian Government, which is the repudiation of existing contracts, and that the effect of it will be just as fatal to the credit of Australia as it will be to this country? Does he further realise that the real point is not whether goods have gone on to the looms already but that the contract has been made and that the exporter, exhorted by the previous Government and this one, has taken the risk in writing that contract, and that if he is not to be protected by this or any other Government, it means the death knell of the export programme?

Mr. Thorneycroft: I assure my hon. Friend, who is well qualified to speak on these matters, that no one appreciates more than I do the importance of maintaining the sanctity of contract in trading relations. Indeed, I opened my remarks on this aspect of the matter by saying how much I deplored the state of affairs which led to countries waiting until the last moment and then relying on savage physical controls, whereas the position would have been dealt with better if it had been tackled earlier.

Mr. Gaitskell: Was there no discussion of the question of breaking contracts at the conference?

Mr. Thorneycroft: I am just about to talk of breaking contracts.
We know the Australian position all the better because we ourselves have had to pursue the same painful path. The measures announced on 1st November last had to be supplemented on this occasion—

Mr. Gaitskell: With the sterling area?

Mr. Thorneycroft: No, in the case of Europe. One of the first things that fell to my lot when I came to the Board of Trade was to administer the cuts and deal with the breaches of contract which we, in the same sort of circumstances, were compelled to inflict upon the Continent of Europe. I assure the Committee that I yield to no man in my detestation of this method of having to carry on a trading system. Indeed, if it is carried on for very long it will be the end of trading between countries, as my hon. Friend the Member for Bury and Radcliffe (Mr. W. Fletcher) said.
If I may, I will now turn to our approach to that subject in the case of Western Europe.

Mr. Gaitskell: Before the right hon. Gentleman leaves that subject, would he please answer my question? It really is most extraordinary that no discussion took place at the sterling area conference, on the possibility of these cuts, as I understand it, or, if it did take place, what was said about them. Was not the possibility that these contracts might be broken raised there? The Government seem to have allowed the entire system under which one sterling area country agrees to discriminate in favour of the others to lapse as a result of this conference—

Mr. Thorneycroft: indicated dissent.

Mr. Gaitskell: Can we please have a clarification on this matter?

Mr. Thorneycroft: The right hon. Gentleman is asking me specifically about a subject which is entirely within the responsibility and the power of the Australian Government. [HON. MEMBERS: "No."] There is no question about that. If the right hon. Gentleman is asking whether we discussed with the Australians the idea that they should break contracts as a specific method of dealing with this, the answer is "No." What we agreed at the Commonwealth Finance Ministers' Conference was, shortly and simply, this: that each country should accept a target, very urgently required at that time, to which it should seek to attain to live within its income. The methods were left and had to be left to the different countries concerned.

Mr. Gaitskell: rose—

Mr. Thorneycroft: I should like to turn, if I may—[HON. MEMBERS: "No."] I think I have answered the right hon. Gentleman.

Hon. Members: No.

Mr. Gaitskell: I am much obliged to the Minister for giving way. Is it the case that there was no discussion at the sterling area conference about the repercussions which the action of Australia, in trying to attain its target, might have on the capacity of the United Kingdom to attain its target? If so, it seems to be the most extraordinary muddle.

Mr. Thorneycroft: All those subjects were undoubtedly discussed but I would remind the right hon. Gentleman that the main problem which confronted the conference was that unless these countries succeed in living within their income, and unless the sterling area as a whole succeeds in doing that very thing, our balance of payments will turn savagely against us and our remaining reserves of gold and dollars will run out, with calamitous results and effects on this country and others in the sterling area.

Mr. M. Follick: That is not an answer.

Mr. Thorneycroft: I now want to say a word about the new restrictions which we have had to impose on trade with Western Europe. Trade is obviously a two-way business and we have no wish to reduce our imports more than we must. I do not hold with the view that we should restrict trade with Europe to the same level to which we may be compelled at any given time to restrict our imports from the United States because of dollar shortage. To do that would be to reduce trade to its lowest common denominator.
Nor should it be forgotten that a nation which sells us a semi-luxury may also sell us a necessity of life or, perhaps, take our textiles in return. But we have to restrain our imports to the level which we can afford and, as hon. and right hon. Members on all sides have pointed out, we are at present paying 80 per cent. in gold through the European Payments Union.

Mr. Gaitskell: The whole sterling area.

Mr. Thorneycroft: Yes, the whole sterling area. I am much obliged to the right hon. Gentleman. Our present intention is to make a further saving of the order of £20 million in 1952 as compared with the imports we should otherwise have received for these goods from the Western European and other foreign countries to which the open general licences apply. But the size of the quotas will depend upon the way in which our situation develops, especially as regards our trade with Western Europe.
We are anxious to cause the minimum of harm to our friends, and for this reason we have exempted from the new cuts not only goods which we desire to import freely, but also such goods as wines and

spirits and citrous fruit for which our European friends look to us to provide a vital market. For this reason we have also decided to admit all goods already in transit and to license freely all goods delivered against firm contracts already entered into. We do not intend that there shall be broken contracts in this matter. We hope in this way to minimise the dislocation of business that is unavoidable in the break of the few weeks while the quotas and licensing arrangements are being worked out. We have our financial difficulties, but we also have responsibilities as a great trading nation and we believe that this is the best method of honouring both.
Now I turn for a few moments to the question of exports. We have been compelled to take these emergency measures to reduce our import bill, but the real action required is, of course, to sustain and increase our export earnings in spite of the difficulties which confront our export industries.

Mr. Ivor Owen Thomas: Would the right hon. Gentleman—

Mr. Thorneycroft: I would rather not give way. I have already addressed the Committee for nearly one hour.
Our most important economic task is to reinforce our export drive. I believe that the Budget introduced by my right hon. Friend on Tuesday is one well calculated to help us in that task. Indeed, it has been conceived in terms of promoting our exports of engineering goods, for one very good reason, namely, that those are the goods which we can sell most readily abroad.
The Government, in raising the Bank rate to 4 per cent., have placed considerable reliance on monetary policy as an effective means of promoting the transfer of engineering resources from home investment to export production. It is our deliberate policy, not in the long term but in the short term, to curtail home investment, to reduce the supply of metal goods to the home consumer and thus to release capital goods for the export trade.
The Government have taken all these measures to restrain home investment with the greatest regret. We all know that the future efficiency and competitive power of British industry depends in the long run on building up our capital


equipment, but there is no alternative to this policy in the light of the world trading situation as we find it today.
Many of our consumer industries have great difficulties at present, and particularly the great textile industry. The Budget recognised those difficulties, and the home demand on them certainly has not been such as to place an obstacle in the way of export trade. In present circumstances, therefore, it is not In the interests of the exports trade to depress the home demand still further.
The right hon. Gentleman opposite said that it was a clever Budget. That was a great tribute.

Mr. Percy Shurmer: Too clever.

Mr. Thorneycroft: A less clever Budget, particularly from someone who was arguing for a tougher Budget—

Mr. Shurmer: Tough on the workers.

Mr. Thorneycroft: —and the use of other than monetary measures, might well have hit very hard the textile industry and have produced a very considerable degree of unemployment.

Mr. Shurmer: Time will tell.

Mr. Thorneycroft: I only say this further about exports. The real need is to increase our exports to the dollar area, above all to Canada and the United States. I know the difficulties which our exporters in the North American markets find. I know that it takes courage to enter those markets against the weight both of American industry and of the United States tariff. But industries in this country have successfully done it. They have broken into those markets and are holding them, and more must do so if we are to attain our goal.
In our financial circumstances today, it is not easy to find room for manoeuvre in which to give incentives for production, but we have made a substantial advance in this direction. It is no small thing to take two million people out of Income Tax. That is the way to give incentive to greater effort.
In conclusion, I say that the test of a Budget is not only how it affects our own people, but also how it influences the views and actions of the world outside.

What matters is not only what we as a nation think of ourselves, but what others think of us. World opinion will be guided not only by the opinions which are expressed on one side or other of the House of Commons, but by the fact that the British people as a whole have acclaimed it as a great Budget and a fair Budget.

4.53 p.m.

Mr. Glenvil Hall: My right hon. Friend the Member for Leeds. South (Mr. Gaitskell), posed several questions during what, I thought, was a very lucid speech yesterday afternoon, but we were told later by the Minister of State for Economic Affairs that it was not his intention to attempt to reply to at least two of those questions and that today we should have the presence of the President of the Board of Trade who would answer them. I am delighted, therefore, to find that the President of the Board of Trade has answered them, for they are very important ones, at some length and in great detail.
There has been until this afternoon some confusion as to what were the intentions of the Government on the Utility scheme, and there also has been great anxiety as to whether the decisions of the Commonwealth Ministers Conference were as good as we were earlier led to believe by the Chancellor of the Exchequer.
I should like to deal, first, quite briefly with what the right hon. Gentleman had to say about the Douglas Report. I thought that he protested a little too vigorously, even for him, that the Douglas Report was not the result of any action taken by the present Government. Searching my mind for a reason why he should be so intent on getting that point over to us, I suddenly remembered that during the General Election and since the "Daily Express" has been running a campaign about the Purchase Tax. It occurred to me that the right hon. Gentleman was quite anxious to show that although now the Government were going to deal with this matter, it was not because he was obeying the crack of the "Daily Express" whip.
We realise, and have done so all along—at any rate, for a very long time—that something had to be done about the


Utility scheme. The original scheme was excellent, but the classifications, as the right hon. Gentleman said, became unwieldy and the specifications very obscure. Above all, as we know, it was viewed by the signatories to G.A.T.T. as a violation of international agreements. It was for these reasons that my right hon. Friend the Member for Leeds, South, when he was Chancellor of the Exchequer, set up what we now know as the Douglas Committee.
The terms of reference of that Committee made it quite clear that so far as this party is concerned we did not want the scheme to be dropped. What we required and what we hoped for was that as a result of the inquiry then undertaken the criticisms to which I have alluded should be met. I think that we can accept, and do accept, many of the recommendations and the views expressed by the Douglas Committee.
I listened very carefully to the right hon. Gentleman, and it occurred to me that he was, perhaps, overlooking at least one of the recommendations that that Committee made. They quite definitely recommended that the deductions that were to be fixed should
be fixed in such a way that a given proportion of current purchases of goods covered by the Scheme would be free of tax
and—this is the important point—that
this proportion should, as far as possible, be the same for all the classes at goods concerned, and be not less than one-half in each class.
I am not sure from what the right hon. Gentleman said—this is a matter we shall come back to when we deal with this in greater detail in Committee—whether that recommendation will be included in the scheme which he has outlined to us today.

Mr. F. A. Burden: It is made perfectly clear in respect of some garments, particularly women's clothing, that much more than one-half of the goods that were originally tax-free will now be tax-free. For instance, a utility coat hitherto was tax-free up to about £13; now, it will be free of tax up to about £9. This shows that my right hon. Friend has more than met the recommendation.

Mr. Hall: The hon. Member underlines what I am saying, and if in the direction of women's clothing what we want

has already been met, I am sure that when we come to the Committee stage we shall have no difficulty in getting the right hon. Gentleman to meet us certainly as to one-half so far as other types of goods are concerned.
From interjections made by my hon. Friends behind me, it will be known that we are very perturbed about the situation that may arise with regard to, for example, footwear. My hon. and learned Friend the Member for Kettering (Mr. Mitchison) last night made what I thought was a very powerful speech to show the effect that the scheme, as we understand it, may have on the area he represents and on the boot and shoe industry as a whole. We also think that it would be clearly wrong that children's wear should be subject to tax simply in order to get tidiness in this field. Although all of us want to be logical and all of us like to see an Act of Parliament and regulations and scales laid down as tidy as may be, when we do that we may create injustice in one direction or another. So although we agree profoundly that something should be done, we are anxious that when it is done it should be done with fairness and not create fresh anomalies or injustices to the buying public.
It appeared to me from what he said that the right hon. Gentleman assumed that we shall always have a buyer's market. I do not know that he is correct in assuming that. We are also afraid that these maximum prices will become minimum prices, particularly because I gather that the only people now being taken into consultation are the manufacturers. I am not complaining, but they naturally fix a figure which gives them the best return for what they produce.
My hon. Friend the Member for Blackburn, East (Mrs. Castle) interrupted, to ask a rather complicated question on Purchase Tax uplift and the right hon. Gentleman indicated that this was a matter we could discuss when we reached the Committee stage of the Finance Bill. I wish to ask him whether it really will be possible to deal with this when we reach the Finance Bill. It may be likely that the Chairman, when we attempt to raise the matter or to put down Amendments, should Amendments be necessary, may rule that out of order. Therefore, I


would ask an assurance from the right hon. Gentleman that he will give us either now or later in the debate, that this will not be barred from discussion when the proper time comes.

Mr. P. Thorneycroft: I have a horrible feeling that the right hon. Gentleman may be right about the Rules of Order, but I can assure him that if it is out of order on the Committee stage of the Finance Bill, that at some stage the hon. Lady will have an answer to the question she has asked.

Mr. Hall: I am much obliged to the right hon. Gentleman. Having had previous experience on the Front Bench opposite when we were discussing matters of this kind, it occurred to me that it may be impossible to raise it in the way suggested, and what the right hon. Gentleman has said confirms that belief. But just an answer to my hon. Friend is not enough; it is a matter which affects both sides of the Committee as hon. Members in all quarters are interested in this very complicated subject.
The right hon. Gentleman gave quite a long list of associations and groups who have advised him and are still advising him, I understood, in these matters. I may have missed it, but as far as I know he did not mention that there were any consumer bodies represented in those talks and negotiations. I think it would be well if the consumer were brought in; otherwise it means that we might presently get a monopoly if manufacturers only took a hand in these discussions and fixed the scales that were to be laid down.
I approach the other main topic dealt with by the right hon. Gentleman with some timidity and a great deal of deference. It is true, as he said, that our sister Dominions are sovereign countries. No one denies that for a moment. They are also entitled, very properly so, to come to their own decisions in these matters. But I think all of us, on whatever side of the Committee we sit, view with disquiet any loosening of the bonds between members of the sterling area, particularly between members of the British Commonwealth of Nations. What has happened in Australia—I make no comment or criticism on that—might conceivably extend. Already this morning,

as others who have read the papers will have noticed, South Africa is talking of taking the same road. It is, I think, very desirable that in matters of trade as well as in other directions we should walk together, and if all we hear is true this is quite definitely a retrograde step.

Mr. R. J. Mellish: Will my right hon. Friend make a comment on the fact that it is inevitable that Australia should take this decision if we in the first place slash imports by £500 million? Does it not necessarily follow that many other nations are going to take similar measures?

Mr. Hall: I do not think it should follow at all. Incidentally, this problem is not new. In 1949, when there was a similar Commonwealth Conference, it was agreed between those concerned that we should cut down non-sterling imports and not, as appears to have been the agreement this time, almost make a start—or so it appears to us—with the trade between the Dominions. We desire closer unity and interdependence between members of the Commonwealth, and nothing is more calculated to loosen the ties that bind us together than to believe that this can be achieved by each going our own way in complete isolation and lessening the economic ties that at present exist and which, I thought, the party particularly wished to see extended.
I come now to the Budget statement by the Chancellor of the Exchequer. I wish to add my congratulations to those that have already been extended to him. He came through the ordeal, we all feel, with great distinction. We on this side of the Committee have a great regard for the right hon. Gentleman, because many of us remember his work for education in the final years of the last war. His speech had not, perhaps, the long, involved, periods that previous generations of hon. Members remember when the great Gladstone opened his Budgets, but in my view what the right hon. Gentleman had to say was none the less acceptable for that. In fact, I think that to most of us on this side of the Committee it was much more acceptable than it would have been if he had attempted to emulate the rhetorical flights of some of his predecessors.

Sir Edward Boyle: I think the right hon. Gentleman win remember that Gladstone took three hours explaining his Budget to the Cabinet and six hours to explain it to the House. I think the right hon. Gentleman will agree that we live in more speedy times.

Mr. Hall: Yes, and as one who has been privileged to read those orations, sometimes during the quiet hours of the night while the House has been sitting, I must say that I wonder at the strength and sense of loyalty which must have animated those who sat through so lengthy a period.
The opening of a Budget by the Chancellor of the Exchequer is the centre of a great deal of interest, and in some ways I suppose it could be likened, on this occasion at any rate, to a christening. Perhaps that is not the proper word to use, because normally when we are christened we are unconscious of the occasion. One might perhaps more properly liken it to a wedding day, though I think it would be difficult for hon. Members on this side to marry what the Chancellor said on Tuesday with all the ballyhoo which preceded it, both in the House from hon. Members opposite, and in the Press.
Before the Budget was opened we understood that we really were in for something quite outside the range of ordinary Budget statements. We had been informed that the situation was unprecedented that there was nothing left in the barrel to scrape; that when the Conservative Party came into office the stocks of food in the country were so low that no bonus could be given to the housewife, and that altogether it was necessary that a Budget of a most serious kind must be introduced.
I remember when I was quite young and was taken to the seaside for my holidays I was always fascinated by a row of machines on the pier. Among them was one which invited me to view "what the butler saw." It is quite obvious here that what the Butler—with a capital "B"—saw in November is not what the Butler saw in March; and we think that what the Butler saw in March bears a much greater likeness to reality, so far as the internal situation is concerned, than what he and others asked us to believe was the state of affairs in November.
It is certainly quite different from what Lord Woolton saw during the election. Up to now, both in the House and outside, we have treated what Lord Woolton said with some levity. But we on this side of the House do view his statement during his broadcast with the utmost concern. The decencies of public life and honesty in politics demands that this matter should not be left where it is.
I have a fairly long memory in politics, not so long as many other hon. Members, but it is a fairly long one. I can remember when I and others raised the question of the mutiny at Invergordon, and the then First Lord of the Admiralty definitely promised us from the Government Front Bench that no reprisals would be taken against the men who had been the ring-leaders in that mutiny. Reprisals were taken, not of course by himself, but by the First Lord who followed him.
I also remember when Lord Snowden came to an agreement with the leaders of the Conservative Party about the land Clauses in his Budget. Later on that agreement was apparently broken, and Lord Snowden as a result left the Government in disgust.

Sir Herbert Williams: That was not the main reason why he left. He disagreed over tariffs.

Mr. Hall: I remember the incident very well. Then there was a Member of this House—he sat for one of the Birmingham constituencies—Mr. Higgs, who had the temerity to say on a public platform that it was essential for the national economy that we should have 10 men looking for nine men's jobs. The present Prime Minister repudiated him and indicated, not unnaturally, that Mr. Higgs was speaking only for himself and not in any sense for the party opposite, which of course was quite true.
But here we have a case which is entirely different. One can forgive a politician who throws off an observation in the course of a speech. One is speaking then perhaps in reply to an interruption, or in the heat of the moment. But this was said in the course of a broadcast. There is not the slightest doubt that when one speaks over the air one weighs most carefully every word one says. The speech is written down, and so it seems to me to be the sort of statement which should have been cleared


with the leader of the Conservative Party.
The promise was given quite categorically. Lord Woolton said "there was not a word of truth in the story that the Tories would cut food subsidies." There is not the slightest doubt reaching millions as it did, and coming as it did from the Chairman of the Conservative Party, the man who had been responsible for collecting funds for that Party, that it was taken as a statement of policy which would be adhered to. We cannot overlook these facts or let it pass lightly from our memories.
The noble Lord apparently made other promises during the Election. He made one to the brewers, not over the air, but privately in a letter. And the astonishing thing is that that promise has been fulfilled, or is in process of being fulfilled, whereas this one, which is of the utmost moment to millions in this country, has been broken.

Mr. Godfrey Nicholson: I am not a brewer, but I am in what is called the drink trade, and I hope that the right hon. Gentleman will be very careful before he makes remarks like that. What is the evidence for such a remark? If the letter to which he refers is suitable for quotation he ought to quote from it; but I personally do not believe it.

Mr. Hall: I do not know where the hon. Member has been these last weeks, or whether he was present when we debated the New Towns Bill. But this letter, which I understand Lord Woolton has refused to allow to be published, is obviously in existence because he has not denied, so I understand, that the promise was made.

Mr. Nicholson: May I correct the right hon. Gentleman? This letter was not addressed to the brewers. It was addressed to a Licensed Victuallers' Protection Association in the Isle of Wight. I assure the right hon. Gentleman that, to the best of my knowledge, which is not all-embracing in this respect, no promise was made to the brewers to whom I have spoken. They are extremely alarmed about this situation, and up to a few weeks ago they had had no assurance on this matter. I repeat to the right hon. Gentleman that, out of regard for his own high reputation, he should not make what

amounts to a most serious and definite charge without better evidence than he has produced.

Mr. Hall: I, of course, have no desire to cross swords with the hon. Member. I am only stating what I thought were generally accepted facts.

Mr. Nicholson: Well, they are not.

Mr. Hall: I did not mean to say, and I do not think I did say, that a letter had been addressed to the brewers. I said a promise had been made to the brewers, and that fact has not been denied. In fact, the hon. Member himself said it had been made to a brewers' association—

Mr. Nicholson: No.

Mr. Hall: I do not know what can be more closely related to an association of brewers—

Mr. Nicholson: I am sorry to interrupt the speech of the right hon. Gentleman so constantly, but I said that the letter was addressed to an association of licensees of public houses and not to the brewers. We do not know even if it referred to these matters. The whole thing is mere speculation, and if the right hon. Gentleman talked with the brewers he would find that they are ignorant of any such promise having been made. As far as I know, there is no foundation whatever for this.

The Chairman: I have refreshed my mind about what we are discussing. I think that we are very wide of the mark.

Mr. Hall: I accept the correction made by the hon. Member for Farnham (Mr. Nicholson). The letter was written to an association of licensed victuallers. I know that there is a difference, although many of the public houses of which the licensed victuallers are tenants are tied to various brewers.
We could have understood this shocking failure to keep a pledge if the Chancellor had shown in his Budget speech that the step he took was essential. But, as my right hon. Friend the Member for Leeds, South, said yesterday, the cut in food subsidies does nothing towards redressing our balance of payments difficulties, which is the one reason given for introducing that cut and other changes.
The Chancellor himself does not make any claim that the food subsidies were essential from this point of view. On the contrary, the possibilities are that in spite of the concessions which have been made, the cuts in food subsidies are likely to increase the price of our exports by increasing the cost of living which will lead to higher wage demands and possibly—although we hope not—industrial unrest. Therefore, I repeat that for the sake of democracy, the good name of politicians and the decency of public life, this matter should not be allowed to rest where it is.
I pass now to some of the speeches made yesterday. I listened with the greatest care to the speech of the right hon. and learned Member for Montgomery (Mr. C. Davies). He is looked upon in the House as the Leader of the Liberal Party, though just quite what he leads it would be difficult to say. As far as I know, there is only one Liberal in the House. Every other Liberal, wherever he may sit, is here with the support of the Conservative Party. To do them justice, the Liberal Nationals acknowledge their obligation. But the right hon. and learned Member apparently believes that he and those who sit with him are here as Liberals pure and simple.

Mr. Percy Daines: Simple but not pure.

Mr. Hall: Actually, there is only one Liberal who was returned, in spite of the opposition of the Tory Party—the hon. Member for Orkney and Shetland (Mr. Grimond), and one could not go much further north than that. He is, as it were, almost hanging on to his seat by his fingernails.
The right hon. and learned Gentleman found the Budget an excellent one. He criticised my right hon. Friend the Member for Leeds, South, on the ground that had he been opening a similar Budget he would have introduced one which was, so he said, "much of a muchness." I assure the Committee that my right hon. Friend would not have touched the food subsidies. He would not have made this drastic cut. As I listened to the right hon. and learned Gentleman, I wondered what some of the old Radical pioneers would have said had they been here to listen to such sentiments. At any rate they, according to their lights and their philosophy, fought for the masses and the under-privileged. They would have been aghast to

hear the leader of that once great Liberal Party say, as he did yesterday, that he was not only in agreement with what the Chancellor had done but almost suggested that he had not gone far enough.
Another speech upon which I must comment was that made by the hon. Member for Morecambe and Lonsdale (Sir I. Fraser). I regretted his intervention. During his years as a Member of the House of Commons he has done a great deal for disabled ex-Service men. We admire what he has done for them. He began by saying that he intended to make a non-party speech but, as so often when a Member begins in that way, it developed most definitely into a party speech of the most aggressive kind.
His speech was designed to prove that by the allowance of the extra 10s. on the basic pension the Government had established a new principle. The facts do not bear out that suggestion. In fact, he mentioned himself that the Labour Government in 1946 added 5s. to the basic allowance made to 100 per cent. disabled ex-Service men. Therefore, the principle was already established. He did not add, as he should have done in common fairness, and as my hon. Friend the Member for Brierley Hill (Mr. Simmons) pointed out, that the Labour Government, during their period of office, did a tremendous amount for ex-Service men.
Although we do not object to the 10s. which is now to be added to the basic pension—in fact we heartily approve of it—we have every right to say, too, that, compared with what the Labour Government did, it is a very small increase falling far short of the demands made by the British Legion of which the hon. Member for Morecambe and Lonsdale is a Leader. They are asking for 90s., and until recently the hon. Member stood by that application. He demanded that and nothing less.
I can remember that when the 1939 Warrant was issued the basic rate for a totally disabled man was 32s. 6d. We have advanced considerably since then and practically all the increases, except for this 10s., have been given by a Labour Government. We were the first to give the right to a pension when a man married after he had been disabled. We abolished the seven-years limit. We have given tax-free and insurance-paid cars to many


totally disabled ex-Service men. We have increased widows pensions and pensions for orphans, and we have made other changes to assist ex-Service men. It is wrong for anyone in this Committee, in whatever quarter he may sit, to pretend to the ex-Service men that the 10s. is nearly all that they have received for many years and that the present Government is the only friend they have.
I wish to revert for a moment to the speech of my right hon. Friend the Member for Leeds, South, who I thought exposed with great clarity and force the hollowness of the contention that, although the cut in the food subsidies increased the expenditure of all of us by 1s. 6d. per week, this and more was being made up to those least able to bear it. When he was giving figures to prove his contention it was pointed out to him that he had failed to include family allowances in his calculations, and that this nullified in some way the calculations he had made.
The Minister of State returned to this point when replying to the debate last night, and sought to prove that because my right hon. Friend had not included family allowances in his calculations that falsified my right hon. Friend's contention. I have since examined the figures he gave and I find that what my right hon. Friend said was correct; that even if the family allowances are added to the figures he gave, a very large number of workers will still be worse off than they are now.
A married couple with two children with an income of £9 or less per week was one of the examples he gave. Under the Chancellor's proposals they will lose 6s. a week on food subsidies; the man will also have to pay 7½d. a week insurance contribution, which means that they will be 6s. 7½d. out of pocket in any given week. What are the gains to set against that? According to the Government the gains are greater than the losses. But are they? He will gain 3s. on the second child by way of family allowances, and in addition he will in all probability get about 1s. 9d. tax relief, making a total of 4s. 9d. a week gain, which makes a net loss of 1s. 10½d. on those items alone, to say nothing of other items which are bound to go up in price.

Mr. William Shepherd: Does the right hon. Gentleman not agree

that it is rather unfair in making this calculation to assume that the extra cost for a child is 1s. 6d.? If he looks at the items of food covered in this connection he will realise that the 1s. 6d. extra for an adult does not apply to the child.

Mr. A. Edward Davies: The increase of 1s. 6d. was given as an average. If it is less than 1s. 6d. for a child, it must be more for an adult.

Mr. Hall: I was taking the figure given by the Chancellor, who indicated that it was a fair figure to take. There are people who have worked this out, and who are of the firm opinion that even 1s. 6d. is not sufficient to compensate for the loss which will be suffered by the cut in food subsidies. But I did not want to be unfair to the Chancellor, and I took the figures he gave. What is undoubtedly true is that, as the cost of these foods begins to rise the cost of uncontrolled foods will rise in sympathy, and I am positive that some people will be tempted to put up the price of their goods because a rising cost of living seems to be the order of the day.
Another instance given by my right hon. Friend was that of a married couple with three children living on £11 a week or less. They will lose 7s. 6d. on the food subsidies; the husband will have to pay 7½d. a week insurance contribution, making a total of 8s. 1½d. On the family allowances he gains 6s., so he has a dead loss of 2s. 1½d. a week. It may be argued that this is not much, and that the loss is trivial, but to the ordinary working-class family 2s. or more is a lot, particularly when we remember that the drain will not stop there. We all know that prices are bound to rise. Entertainment charges are going up; as a result of the increase in the petrol duty fares will too have to be increased; postal charges also are going up, and in a number of directions the cost of living will be increased.

Mr. Burden: Would the right hon. Gentleman also bear in mind that there are very many goods which are falling in price, particularly textiles? If he is quoting one side, in fairness he should quote the other side.

Mr. Hall: I am delighted to know that the price of textiles may be coming down.

Mr. Burden: It has come down.

Mr. Hall: But we do not buy suits, for example, and other items of clothing every other day.

Mr. Burden: I should like to get this point clear. If the right hon. Gentleman knows anything about the trade he will realise that this does not involve only overcoats and suits. It applies equally to tablecloths, table-napkins, and many of the things which women use in their houses every day.

Mr. Hall: I am sorry if I gave the impression that I thought of textiles in terms of clothing only. That would be absurd, of course. Nevertheless, I do not think that makes my point invalid. These sums for food and insurance which a man has to find are constant week by week, and the family allowance is constant, but with the extra cost of goods in other directions the family with three children on an income of up to £11 a week will suffer definite loss each week.
I wish the Chancellor could have seen his way to extend the family allowances to the first child. If he had done that, this gap which will undoubtedly be there in many households might have been closed, or at any rate greatly lessened. In Committee on the Finance Bill, therefore, it may well be that my hon. Friends may put down Amendments in order to try to reduce the loss which will undoubtedly come to so many thousands of the poorer section of the community.
I was very disappointed by the speech of the Minister of State when winding up the debate last night. I listened to him very carefully, but I thought he failed to answer any of the serious criticisms made by my hon. Friends—perhaps not unnaturally, as he heard so few of them. At any rate, we did expect that he would answer the main points put to him by my right hon. Friend the Member for Leeds, South. He was asked the definite question whether the increase in the bank rate would lead to a further rise in the Public Works Loans Board rate, and whether this in turn would be compensated for by an increase in the housing subsidy. The right hon. Gentleman said—and if hon. Members opposite can make anything of it they are cleverer than I am:
It is a contingent and conditional question. It is…too early to estimate the rate at which long-term lending will eventually reach its level. It is even more premature

to make estimates as to what we should do in different possible contingencies."—[OFFICIAL REPORT, 12th March, 1952; Vol. 497, c. 1500.]
In other words, he was saying that he would not commit himself. We cannot let the right hon. Gentleman and the Government get away in a cloud of words of this kind. Local authorities everywhere have got to make commitments about housing. Quite obviously the rates will go up in quite a number of directions. Building societies and others are bound to put up their rates, and it is more than likely that the Public Works Loans Board—

Mr. W. Fletcher: Will the right hon. Gentleman explain how a rate goes up "in quite a number of directions?"

Mr. Hall: I was using phraseology which is quite common and is well understood. The Bank rate goes up, deposit rates go up, Treasury bill rates go up, and in all directions we find all kinds of interested bodies, including the banks, putting up their rates of interest. We believe that inevitably the rates for long-term lending by the Public Works Loans Board will also have to go up. I think we should press the Government to tell us whether, supposing it does—and there is every likelihood that it will at a not-distant date—the extra charges which will undoubtedly fall on local authorities will be compensated for in the way that the recent rise has been compensated for.
The Minister did not answer the intervention of my hon. Friend the Member for Stechford (Mr. R. Jenkins), who asked how the change-over from the so-called soft economy left by the Labour Government to a new purged economy is to be achieved in a Budget which, in fact, increases the spending power of the people by at least £28 million.
The plain fact is, of course, that although this has been described as a tough Budget—the City expected something tough—it is not a tough Budget at all to the well-to-do. It puts greater burdens on the poor than they previously bore; its incentive to the workers is largely illusory, and it will undoubtedly raise the cost of living at a time when such cost needs no incentive to rise. It also increases the burden of the National Debt, a subject on which we shall have something to say when we come to the Committee stage. The good things it contains—and it does contain some—we


shall wholeheartedly support, but we shall fight the obnoxious parts of it when the time comes to the utmost of our strength.

5.43 p.m.

Viscount Lambton: It is with great deference that I rise to follow the right hon. Member for Colne Valley (Mr. Glenvil Hall), and I only hope that in this, my first attempt, I may in some slight way emulate his skill. During the past few days we have been discussing the Budget, but it seems to me that after the first stunned amazement with which the Budget was received, very few genuinely constructive criticisms have come from the party opposite. One has been amazed at the spirit in which the Opposition have received this Budget. It almost seems as if they were surprised at the way in which the Chancellor dealt with the situation and wished that his predecessor had done the same in earlier times.
The question which struck me directly the Chancellor finished his Budget speech was whether he had been firm enough. During these last months, the country had been gradually worked up through the medium of the Press and by speeches of hon. Members on both sides of the House to the fact that we had to face a very great and severe crisis. I believe that the country was ready to face any great impositions placed upon it.
We have had a cut in the subsidies, and I am quite certain that, despite all the opinions of the Opposition, that was a considerable move in the right direction. What I regret is that the Chancellor has not gone further in that direction. During the last few years we have been standing on what might be described as the quick-sands of Socialism. We have to get away from that position and back to a sound economic position.
Until we have done away with all subsidies, and until this country stands on a firm basis, I do not see how we can have a continuous move forward. By that I mean that the country should go forward through extra efforts and that extra efforts should be rewarded by reliefs from taxation. As long as these subsidies remain there is always the danger, or so it seems to me, that at perhaps some not so distant date we shall have to take a step backwards in order to do away with them.

This country should now go forward by continuous effort; that effort should be rewarded by relief from taxation, and, in its turn, that relief should encourage extra effort.
There is another point I wish to emphasise. It deals not so much with the present crisis, but with what lies ahead of us. It seems to me that there is a very great danger that we may regard the crisis which faces us today as being one which can easily be conquered, and that when it has been overcome, an easy time lies ahead of us. I think the exact opposite is the case, and I wish to emphasise the state of affairs, the seriousness of which will be apparent in the years to come, regarding the population of this country.
We know that in a few years' time the wage earners of this country will have to support a large number of aged people. If we look at the Government's review of population for 1947, we find that in every thousand those over 65 number 104, but that by 1977 they will number no fewer than 160. The burden placed upon the wage earners of this country will increase by no less than 50 per cent.
Also mentioned in that review is the cost to the Exchequer of retirement pensions. Without making any allowance for any future fall in the mortality rate, the cost is estimated to increase from £238 million in 1948 to £501 million in 1977. This assessment was made before the present rise in the cost of living and before the present increase in pensions. Therefore, in a few years time this country will be faced with a crisis which is likely to overtake the very greatest efforts of the wage earners unless that fact is realised and faced today.
While one can but admire the way the Chancellor dealt with the problems of the present one wonders how he intends to deal with this great problem of the future. One cannot encourage this generation to produce more by saying to them, "Produce more and you will get extra comfort in five or 10 years' time." They produce more in order to support the greatly increased number of dependents.
How is this problem to be solved? The right hon Member for Ebbw Vale (Mr. Bevan), wants the social services retained intact, but we must consider the enormous implications that that would


involve. We must have regard not so much to the words of the social service legislation as to its intentions. It was the intention of social service legislation originally that every man and woman in this country should be helped from the cradle to the grave by the State. So difficult are the problems that lie in front of us that I think we shall have to consider very shortly whether or not the total aims of the social services should not be reduced and whether, in order to provide security from birth to responsibility and in old age, the full weight of maintaining the health services, without any amelioration, should be laid upon every man and woman during his or her period of full activity.
Indeed we may also have to consider the whole question of pensionable age. One thing is certain—that before us lies a crisis which is certain to mount as the years go on. This generation must realise that one cannot hide behind the word "State," for that term in matters of production only means that section of the population which can produce; and upon how much that section of the population can produce depends what the old people and the children can obtain. We must meet this threat to our future. Today's generation must realise that they will be the old age pensioners of the future; and unless we are careful we may by present prodigality endanger future security.

5.54 p.m.

Mr. Harold Wilson: It is my privilege to congratulate the noble Lord the Member for Berwick-upon-Tweed (Viscount Lambton), on a maiden speech to which we have been all delighted to listen. It is in tradition that in a maiden speech one preserves a delicate balance between being controversial and being non-controversial, and I believe that the noble Lord kept that balance pretty well to the satisfaction of the whole Committee.
I am sure that we would all agree upon one thing—that he is clearly an honest Tory. There is no nonsense about his "me-too-ism" of the Chancellor of the Exchequer; and the noble Lord did not in any way attempt to disguise where he stands on the social services. I am sure that when he addresses us on subsequent occasions and he is able to be really controversial, we shall have a fighting

speech and that many of my hon. Friends will be very keen to take him on.
I must say that I rather regret the form in which this debate is taking place. It is different from most Budget debates we have had in these post-war years in the sense that on previous occasions we have had always an Economic Survey before us and have been able to debate the economic situation as well as the Budget proposals. Sir Stafford Cripps, in particular, used to devote a great deal of his time to discussing the general economic condition of the country as well as his own financial proposals.
The Chancellor's speech was almost purely financial and bore so little relation to the economic needs of the country that I could not understand why we had to have this early Budget. We might as well have waited another month. It does not contribute anything to the solution of our economic problems. It is quite clear that the Tory attack on this problem is of a purely financial character, aiming at deflation and a cut in real wages by allowing and even forcing prices to rise.
It is true that the Chancellor said something about real resources, but he said nothing about the problem in real terms and very little about production. He dealt with the total volume of resources in money terms. The speech of the President of the Board of Trade today has carried the debate into consideration of real facts as opposed to monetary facts for the first time, and particularly his references to the Utility scheme, to Purchase Tax, and to the export trade, to which I should like to turn in a moment.
The main complaints about the Budget that have been registered from this side of the Committee are, first of all, about its actual contents—what it has done to redistribute wealth and income, and redistribute them in the wrong way; and, second, the fact that it is treated as a purely financial operation and is not related to the pressing and urgent needs of the country.
On gleaning the speeches of the Chancellor of the Exchequer and the Minister of State for Economic Affairs—and particularly the latter's—I find there has been no attempt to deal with the economic problem at all. Indeed, the speech of the Minister of State was particularly disappointing. He did not try to speak as


a Minister of State for Economic Affairs, but rather as a full-blown Financial Secretary to the Treasury; he made no attempt at all to discuss the problems of production. In a moment I will come to the point made by the right hon. Gentleman the President of the Board of Trade, because I think this was the first real and honest attempt he has made in this Parliament to address himself to the problems of his Department and to tell us something about the future of export trade in this country.
The Chancellor has been favoured with one very valuable legacy from his predecessor. That is the Budget surplus of £360 million, against a surplus of £39 million estimated by my right hon. Friend the Member for Leeds, South (Mr. Gaitskell). Of course, that windfall gained on last year's account goes straight into redemption of the National Debt under the New Sinking Fund provisions. It is a striking fact that last year we paid off from the Budget itself the whole of the debt incurred by William Pitt in fighting the Napoleonic wars. It is a very nice thing to be able to do—

ROYAL ASSENT

6.1 p.m.

Whereupon The GENTLEMAN USHER OF THE BLACK ROD being come with a Message, The CHAIRMAN left the Chair.

Mr. SPEAKER resumed the Chair.

Message to attend the Lords Commissioners.

The House went; and, having returned—

Mr. SPEAKER reported the Royal Assent to:

1. Judicial Offices (Salaries, &amp;c.) Act, 1952.
2. Festival Pleasure Gardens Act, 1952.
3. Merchant Shipping Act, 1952.
4. Agriculture (Fertilisers) Act, 1952.
5. Glasgow Corporation Order Confirmation Act, 1952.

WAYS AND MEANS

Again considered in Committee.

[Colonel Sir CHARLES MACANDREW in the Chair]

Question again proposed,

AMENDMENT OF THE LAW

That it is expedient to amend the law with respect to the National Debt and the public revenue, and to make further provision in connection with finance, so, however, that this resolution shall not extend to giving any relief from purchase tax otherwise than by making the same provision for chargeable goods of whatever description or by reducing the first, second or third rate of the tax generally for all goods to which that rate applies.

BUDGET PROPOSALS

6.12 p.m.

Mr. H. Wilson: That, I suppose, is the price of mentioning William Pitt, but I was at least congratulating the Chancellor that he is able to start this year's accounts with that very substantial surplus, which was equivalent to the whole amount raised by William Pitt for fighting the Napoleonic wars. This was a nice thing to be able to do, but I am certain that with the hardships our people have been going through in the post-war world, this was hardly the year in which to pay off that particular amount of debt.
Turning from the purely financial to the economic background of the Budget, it seems, reading through the Chancellor's speech and those of the Ministers who followed him, that they are placing their hopes on five main things—on import cuts, on running down stocks, on increasing exports, on slackening investment and on increasing production.
Let us have a look first at import cuts. These cuts which are proposed are partly possible through the running down of stocks. It is quite clear to the Committee that cutting imports is a disease that is very catching. Some of us said that last November. Other nations get the same idea, and in the long run there is no nation which suffers more from the progressive cutting of imports than the United Kingdom.
We have now had this very regrettable occurrence in Australia, and I thought that the President of the Board of Trade,


in his failure to answer some of the questions put by my right hon. and hon. Friends today, showed a very lamentable control over what is going on. I think that, for the first time in any debate on economic affairs since the end of the war, we have had to debate a situation in which Commonwealth trade is falling.
The right hon. Gentleman did not "come clean" about the Commonwealth Finance Ministers' Conference, and, I thought, neither did the Chancellor. At that Conference there was a skeleton at the feast. I am referring to the Minister of Finance from Canada. Of course, we are all very glad to have him at any conference, but I believe that it was the presence of the Canadian Finance Minister which prevented the Chancellor from proposing outright discrimination against the dollar, which it is clear is what we ought to have done at the Conference.
It is all very well for Australia to say that she faces heavy balance of payments troubles and must cut her imports. We all agree that Australia should plan to cut her dollar imports—non-sterling area imports—and increase her imports from the United Kingdom and the rest of the sterling area. The Chancellor could not do that, because he had the representative of Canada sitting round the table with him, and I sympathise with him in his difficulty.
I repeat, as I said in an intervention earlier this afternoon, that the Government ought to make clear to Australia that when, a year ago, we faced a very serious decline in our balance of payments with Australia, we did not cut imports from Australia, and that there is no reason now for Australia to cut imports from here. It is all very well the President of the Board of Trade saying—

Mr. Burden: Surely, the right hon. Gentleman will agree that the position was a bit different. It is different because Australia was able to sell us the food that we must have and raw materials which would be processed and on which dollars might well be earned.

Mr. Wilson: The hon. Gentleman is preaching a very dangerous doctrine, and I commend him to think before he rises. The situation was different, but in

another sense—and I grant this to the hon. Gentleman—that at that time, and now, we were heavily in debt to Australia, but, although in debt and with our debts increasing, we did not cut down our imports from Australia. Today, we are still in debt to Australia, but Australia cuts her imports from us.
The second point I would ask the President to explain is this. There is in Australia, as I said in the House three or four weeks ago, a certain degree of protectionism and some very powerful protectionist lobbies supporting the interests of secondary industries. I am afraid that, as a result of import cuts of this kind in Australia, powerful vested interests will be built up behind these import cuts, and it will be very difficult once again to secure the flow of trade between this country and Australia.
Another thing that surprised me in the speech of the right hon. Gentleman and that of the Chancellor was that one heard so little about South Africa. South Africa is now coming into the picture. Are they to cut imports from us, or pursue a discriminatory policy? The Commonwealth Finance Ministers' Conference should have led quite simply and plainly to an increase of trade within the sterling area and to discrimination against the dollar area by the sterling area as a whole. That is what should have been done, and there would have been nothing in that which would have been contrary to our international obligations, because the right hon. Gentleman knows that such measures are permitted when we are in balance of payments difficulties, as we most certainly are.
The second point on which the Chancellor has been basing his case is the running down of stocks—the stocks we built up so painfully and at a heavy cost in 1951, and about which hon. and right hon. Gentlemen opposite made some very powerful speeches. I remember the eloquence of the Secretary of State for the Colonies on many occasions. Now he is a member of a Government which is running down stocks, and I do not know—

Mr. A. C. M. Spearman: Would the right hon. Gentleman agree that, if they had cut them in 1950, there would have been none at all?

Mr. Wilson: The hon. Gentleman has not produced any arguments at all for running them down in 1952. I do not know by how much they are to be cut, because the Ministers have been very "cagey" about telling us. My own impression is that they will be cut by at least £150 million this year.
Perhaps the right hon. Gentleman will tell us whether that figure is right or not, but how, in heaven's name, do they square the cutting down—how do they reconcile this dangerous depletion of stocks—with the fact that this is nominally a re-armament and defence Budget? I am not going into this question further, because I think the Committee knows my views on that position, and it is certainly very plain and clear to the Committee that, if defence expenditure had been smaller, we could have had a very different Budget.
I am asking about the reduction in stocks. Let me take the case of softwood, on which there was a Question today to the Secretary for Overseas Trade. I understand that it is the intention of the Government to run down timber stocks this year by about 250,000 standards. Perhaps, if I could have the Chancellor's attention for a moment, he would tell me if that is correct. He should know, because his Budget centres on that. I presume that that figure is roughly correct. [An HON. MEMBER: "He does not know."] Perhaps he does not know.
Stocks at the end of 1951 were three-and-a-half times as great as they were at the end of December, 1950—a remarkable build-up last year; and they are higher than at any time since the end of the war. One reason they were accumulated last year was that they formed part of the defence preparations. Timber is a bulky commodity. If we were to run into an emergency we should, of course, need a large amount of shipping space to bring timber to our shores, but now the Government are to run down their timber stocks this year by 250,000 standards. This is equivalent to over 600,000 tons of timber in the year.
Has the Chancellor worked out, has the Minister of Defence worked out, what this would mean if war broke out? This is a re-armament Budget; this is a period of national emergency. I will tell the

right hon. Gentleman what it would mean. It would mean, if war were to break out, when the Government have run down stocks by that amount this year by deliberate action, that to replace that amount of stocks we should require to take 60 large Liberty ships, or 120 5,000-ton vessels, and immobilise them for five or six months while they could go through the Panama Canal and round to the west coast of Canada and back.
I do not know how many destroyers, corvettes, frigates, and other escort ships of that kind, would be required to convoy those ships—perhaps, convoying them up the west coast of Canada, as well as across the Atlantic. Has the First Lord of the Admiralty put in a bill to the Chancellor asking for these additional destroyers to be built? He must have if he is to face this danger of war that we hear so much about.
This is an important fact. This run-down of stocks shows how fundamentally insincere the Government are in certain aspects of their defence programme. Or else, at least, it shows their willingness to put national solvency ahead of the defence effort. But if they are willing to put national solvency ahead of the defence effort, why are they not willing to do the same thing in relation to the engineering industries, for the improvement of our export trade? If it is right to do this with timber stocks, it is right to do it with engineering exports.
I go further. If we had a real partnership in defence in the North Atlantic community, I should have thought that the United States would have been horrified at the proposal to run down bulky stocks at this time; and I should have thought that the United States would have proposed taking and holding those stocks in this country; because the United States have a very real interest in the Atlantic, and would have a very real interest in the battle of the Atlantic if war were to break out.
I am not saying whether it is right or whether it is wrong to run down timber stocks. I am simply saying it is inconsistent to do that if at the same time we are pressing on with defence expenditure in general on the scale which is proposed in this Budget. But I should say that, if the United States did hold stocks in this country, that would be a much more valuable and real form of assistance


than this very dangerous military security aid.
Now I come to exports, on which the President of the Board of Trade addressed us. It is quite clear—for the Chancellor said it, the Minister of State for Economic Affairs said it, and the President of the Board of Trade said it—that we are counting on increased exports. But how do they propose to get those increased exports? In what commodities? And to what markets? Because the significant fact of the last few months is that there has been a stagnation of our export trade. Let us consider the volume of exports. Taking the base year 1947 as 100, the volume had risen to 140 per cent. in 1949. In 1950 it had risen to 162 per cent. Last year it rose only to 167 per cent. In other words, while exports increased by 16 per cent. from 1949 to 1950, they increased by only 3 per cent. from 1950 to 1951.
Let us look at particular types of exports. We find that metal manufactures and engineering goods, which were half of our total exports as recently as 1950, are now barely rising. The index number of metal manufactures and engineering goods, which increased from 144 in 1949 to 167 in 1950, rose only to 168 last year. Textiles and clothing, which had risen from 139 per cent. in 1949, two years ago, to 148 per cent. in 1950, rose only to 150 per cent. last year. Woollen and worsted exports, of course, fell very sharply in 1951.
In what industries are we to see this exciting increase, and in what markets? Our two most important markets, Australia and South Africa, are now to be closed, to us, at least as regards quite an important part of our exports. Australia accounted for more than 12 per cent. of our total exports last year, and South Africa more than 6 per cent. What hope have we now of expanding exports to those markets?
Then there is the problem of our dollar export markets. Our exports to the Western Hemisphere in 1949 were 15.26 per cent. of our total; in 1950, 18.26 per cent. of the total—some sign of the success of the dollar export drive carried on by the late Government. Last year they fell from 18.26 per cent. to 16.97 per cent. and in the fourth quarter of that year they were down to 14.87 per cent. The exports of cars to Canada, one of our

most important dollar earning sources, were of the value of £2,647,000 in 1950, and they were down to £1,760,000 in 1951. Where do the Government think they are going to get those exports, and how do they think that the Budget proposals will help?
In South America we are facing 'dangerous and growing German and Japanese competition. Are the Government hopeful that they will increase our exports there? What single step have they taken in the proposals put forward for increasing those exports? What about our trade with Eastern Europe? Including re-exports, our total shipments to Eastern Europe last year were up on the previous year, mainly as a result of rubber shipments. Are those shipments to be maintained? I have asked Questions on many occasions in this Chamber about that, but have had not a murmer from the Government. I hope that before the debate is over we shall hear something about this, otherwise we shall be forced to conclude that this hope of increased exports on the part of the Chancellor of the Exchequer is a delusion.
At present we are facing a long-term crisis in our export trade. I think that that is what the Chancellor really meant when he referred to the 50-year development of the crisis. Many countries have developed their own industries now, and the leadership we had in the 19th century has disappeared. In many countries they have their own consumer goods industries, and we cannot export our textiles to them. We hear that even Pakistan, the hopeful new post-war market, will be self-sufficient in textiles by 1956. At any rate, that is the policy Pakistan proposes.
We have to direct ourselves now to a very different pattern in world exports. We can no longer look to exporting consumer goods on the scale that we have been doing in the past. When an export market reaches a certain stage of development it will provide its own consumer goods industries, and it will look to us for machinery with which to develop them. When a country starts like that, it will take piece-goods from us. Then it will make its own and we must be prepared to supply textile machinery. Then that country will start to make its own textile machinery, and we must adapt ourselves and export, perhaps, steel or


machinery for making steel. We must keep up with the markets and with the changes in the markets in all these countries. We have to recognise that, as these different countries develop, and at a different pace, we have to swing about our exports from one country to another and from one trade to another.
The only answer that the Government have given when we have said, "How will you increase exports, particularly of engineering goods," which the President of the Board of Trade rightly said is what the world wants, is to say that they intend to cut capital investment and restrict imports. That is a most dangerous course of action. It is weakening our competitive force in the world markets for many years ahead.
This is the year in which the Government are saying, "Things are so bad that we have to sell the seed corn." That is the basis of their economic policy. They are providing nothing for the future. They are running down our stocks of raw materials and, at the same time, cutting down investment, which is the very lifeblood of our export industries.
This is at a time when the United States, partners with us in the defence effort, are increasing their capital investment on a scale unparalleled in their history. This is at a time when Germany and Japan, our most dangerous rivals, are building up their war-shattered industries with new machinery and highly efficient machinery, and the Government are saying, "We can spare nothing for replacements in Britain." How do the Government propose to deal with this problem? They tell us, by increased production.

The Secretary of State for the Colonies (Mr. Oliver Lyttelton): Do I understand the right hon. Gentleman to say that the Government have devoted nothing to capital investment? If so, that is a slight over-statement.

Mr. Wilson: The right hon. Gentleman is, of course, correct. I should have said, "We are cutting capital investment."
The Government are counting on doing this by increasing production, and the Chancellor of the Exchequer has merely counted on an increase of 3 per cent. in production this year. That was the figure he hinted at. The plain fact—and here

again we are facing a new situation—is that production, for the first time since the end of the war, is falling today. National production is falling.
If we take the production index, in November last year it was 152 compared with 153 the previous year. In December, it was 137 compared with 140. And that production index carries behind it considerable increases in coal production and mining; if we look at the index for the manufacturing industries, we find that in November it was 157 against 159 the previous year, and, in December, 139 against 144.
We are facing a very serious fall in our national production at the present time That is the most significant factor. How do the Government hope to get these increases in production? Purely by tax incentive?—because they are creating conditions in which production cannot increase. In the first place, we cannot increase production when we have a shortage of raw materials. Secondly, we cannot increase production if we are to have a growing fear of unemployment. It is no good coming along and saying, "You will have tax incentives, so work harder," if the workmen in one industry can see themselves working themselves out of a job through shortage of materials, or asking people in another industry to increase production when they can see themselves working themselves out of a job through shortage of orders. Thus, all the Chancellor's exhortations and tax incentives will be useless.
There is one other serious thing about production. It is that the Chancellor is producing a situation in which he will disrupt large parts of our economy. I am not going now into and and sterile discussion as to whether the Budget is inflationary or deflationary. These terms do not apply in the industrial world we have today, because what we have had for several months is the situation in which some industries are already facing slump conditions through lack of orders, while other industries have plenty of orders but cannot get raw materials. That is the situation in the country.
It is no good arguing whether prices in general will go up or down. What will happen as a direct result of this Budget is that food prices will go up still further, the need for higher wages will


be all the greater, while, at the same time, the harsh Tory deflationary policy being operated by the State—the 4 per cent. Bank rate, the squeeze on bank loans and all the rest of it—will force very large numbers of small firms into bankruptcy. Make no mistake about it, it will act in the most devastating manner in the Development Areas, where we had to spend six years clearing up the mess left by hon. Gentlemen opposite.
Now they are coming back again with the same financial policies to create the same mess. But what is the situation going to be? If prices rise more and more, people will need, and rightly demand, wage increases. At the same time, many firms and industries, through slump conditions and this financial squeeze, through bankruptcy, will not be, or will say they are not, in a position to give these wage increases, and so there is a grievous danger of industrial conflict. Therefore, I ask how the Government are to get this increase in production if industry is short of material, paralysed by the fear of unemployment and liable to be torn asunder by the industrial conflict which must be the natural result of the Chancellor's policy.

Mr. W. Fletcher: The right hon. Gentleman keeps saying "shortage of raw material." Does he remember his speech one Friday afternoon in the last Parliament, shortly after he had left office, when he admitted that it was entirely the fault of his own Government and their lack of foresight that the materials were not there?

Mr. Wilson: Is the hon. Gentleman referring to the speech which I made on 2nd March, 1951, or to the one I made on 16th April? In neither did I suggest, even remotely, because it would not have been the truth, that the situation referred to by the hon. Gentleman was the fault of the last Government. If the hon. Gentleman wants to look it up, he can.
It is against this production background, of which we have heard so little from right hon. Gentlemen opposite, that this debate must be judged, and judged against that background it is seen, like the Chancellor's previous proposal, as totally irrelevant and doctrinaire, just as the attack on the health services was a month ago. It is a redistributive Budget

—redistribution of the whole of the income of the country in such a way as, on the whole, to make the poor poorer and the rich richer. The Chancellor appears before the country as a kind of "Robin-Hood-in-reverse" who will rob the poor to give to the rich.
We have had figures from my right hon. Friend this afternoon. Take a married couple with an income of £5 a week. They will be 2s. 6d. a week worse off, while the man with £2,500 a year will be 18s. a week better off. A couple with one child, earning £6 a week, will be 5s. a week worse off and the £2,500 a year man will be £1 a week better off. A couple with two children, earning £8 a week, will be 3s. a week worse off and the £2,500 a year man will be 24s. a week better off, and so on.
If we take the whole group which might loosely be called the working class and lower salaried workers, that is, roughly speaking, those below £550 a year, which accounts for three-quarters of our total population, they will bear, quite obviously, at least three-quarters of the cuts in the food subsidies—say, £120 million. They will get probably more than three-quarters of the previous increases, but even with the concessions put forward, they are worse off as a group than they were before the Chancellor's Budget. They cannot recover that from the improvement in the tax tables, whereas the other quarter of the population do gain it on the tax tables.
I should like to refer to the right hon. Gentleman's speech about the D scheme. We are all interested in this international problem, and we all recognise that something had to be done. I certainly feel—so do my hon. Friends—that in many respects the scheme goes too far. In the first place, the D figures in the statement are far too low, and we shall press for increases in them in order to reduce the volume of clothing and textiles which will be subject to Purchase Tax. Secondly, I believe we are all agreed—the right hon. Gentleman showed that he had it very much in mind—that it is vital to provide some assurances about quality.
As he said, during war-time there were simple Utility schemes which were fairly well standardised with specifications. After the war they were relaxed and widened, partly because the Board of


Trade wanted to exempt a good many of the items from Purchase Tax—they were put into the Utility scheme because we did not see why people should be paying Purchase Tax on very many of them—and partly because that extension was essential to encourage the promotion of our export trade.
What is needed now—I hope that the right hon. Gentleman will bear this in mind before he goes too far in otherdirections—is the reintroduction at the very base of the scheme of a real war-time Utility scheme based on specifications and full price control. It should be tax-free, and I strongly suggest that, if possible, it should be subsidised. That is particularly important in connection with children's clothing and footwear.
Within the range of goods now covered by the Utility scheme, I welcome what the right hon. Gentleman said about obtaining guarantees of quality and also in regard to the Merchandise Marks Act. He will agree, that the Bill to amend that Act was one of the legacies that we left him. I agree with all that he said about the British Standards Institution, in which we all have very great confidence. It is fortunate that the Director of the Institution, who was transferred from the Board of Trade, had many years' experience of running the Utility scheme.
It is important that these things should have statutory backing to give some real assurance of authority. In introducing the new Utility scheme, the right hon. Gentleman might have referred to basic standardised goods such as towellings, sheetings and shirtings, which could still bear the label "CC41." But on the rest of the goods now in the Utility scheme, instead of our having all these labels, why cannot we have something to which everyone could easily refer—it might be "DD52"—to show that the goods conform to the standards of the B.S.I. or other marks, such as that of the Cotton Board.
It is important to push on with this so as to get some general assurance of quality for the whole scheme; for instance, in regard to such things as freedom from fading, freedom from shrinking, wearing quality, anti-abrasion quality and weight. I hope that the right hon. Gentleman will press on actively with this and

that when he introduces legislation he will make it illegal to put the new mark on anything which does not fulfil the stipulated tests.
I foresee a real danger. As the Chancellor plunges more and more families into real poverty, as he will do through unemployment and high food prices, as he cripples the clothing and textile trades with the financial squeeze, we shall find more and more firms who are short of money wanting to dump shoddy goods on the home market in order to raise money. We shall see that danger more and more as 1952 goes by. That is why the right hon. Gentleman must push on and get some assurance of quality and some guarantee against shoddy production.
I summarise the Budget proposals in this way. They make no contribution at all to the solution of our economic difficulties. They make no contribution to our exports. They give us no hope at all of even staying the reduction in production, let alone of increasing production. They entail a transfer of burdens inside the country on the whole in favour of the rich against the poor. They rely on deflation and on bankruptcies to do what the Minister of State for Economic Affairs calls "purge the country," a phrase which I do not like.
If that is the Tory policy, we can at least say that we have been warned. The Tories are relying on high food prices, high rents, dearer coal and dearer transport to reduce the demand for the basic foods and consumer necessaries and thus to reduce imports. The right hon. Gentleman talked about "realism." What does he mean by it? He means that the purchasing power of the people is to be cut until they cannot afford to buy their rations. That is what it means, and that is what this policy is designed to do.
What is it all for? What is behind the Budget? What is the purpose in all of this? Is this supposed to increase our strength as a nation? Are we stronger now than we were when we embarked on the re-armament programme a year ago? Shall we be stronger after 12 months of this Government's economic policy? If our aim is to be strong in the face of Russia—right hon. Gentlemen opposite say that that is our aim—shall we be stronger as a result of the Chancellor's proposals?
If our aim is to be independent of the United States—I trust that is the Government's intention, although they have not stated it quite so clearly as that—shall we be more dependent or less dependent on the United States as a result of this policy? Will the Budget and the economic policy strengthen the unity of our people, or will they act as a new disrupting influence? I submit that these are the tests on which our Budget and economic policy must be judged, and on those tests right hon. Gentlemen opposite and their colleagues must stand condemned.

6.47 p.m.

Captain Charles Waterhouse: If I were to attempt to answer the right hon. Member for Huyton (Mr. H. Wilson) I should have to inflict another very long speech on the Committee. I completely disagree with almost every point that he has put before us. After all, he held an exalted position in the last Government, for he was the President of the Board of Trade, and he must know that a great many of the evils to which he has referred are directly and indirectly his responsibility.
The right hon. Gentleman gave a list of the afflictions which are likely to fall upon us: Our trade with Australia was likely to disappear; our trade with New Zealand was to be cut; our trade with Eastern Europe was in jeopardy; by 1958 our trade with Pakistan would go altogether. Then he went through the ordinary economic sequences of events, how one first of all exports consumer goods and then machinery and then the machinery to make the machinery; but he never came down to the real fundamental basis of our trade, which is its excellence and its resilience and the fact that, even when markets become full of home-made goods, we can make things which are desired by other manufacturing nations.
In the early part of his speech the right hon. Gentleman made a rather unfortunate and uncalled-for side attack on Canada, remarking that Canada was at my right hon. Friend's Conference. We all realise that it is most unfortunate that Canada has to be on a dollar basis. If Canada could be on a sterling basis we should have no dollar gap and no dollar trouble at all. The right hon. Gentleman

might in fairness have said that Canada has, in the time of our emergency since the war, when he was in office, given us many hundreds of millions of dollars, free, gratis and for nothing, which tided us over.

Mr. H. Wilson: I am sure that the right hon. and gallant Gentleman does not wish to be unfair. If he will look up the speech I made on 1st May, 1950, and also my speeches on several other occasions, he will find that I have spent a great deal of time paying tribute to Canada's help to this country, and I should be glad to do it again. Nevertheless, I am making clear what ought to be clear to every hon. Member in the Committee, and that is that as long as Canada is based on the dollar there is this problem about a Commonwealth finance conference, and that is why we were not able to increase trade within the sterling area.

Captain Waterhouse: I appreciate the difficulty, but I did not like the inference that in some way Canada was the black sheep of the family. [HON. MEMBERS: "He never said that."] If hon. Members opposite would do me the justice of listening to what I say, they would have known I did not say he said it; I said that was the inference. If the right hon. Gentleman had not got that in his mind then why did he make the challenge to my right hon. Friend the President of the Board of Trade and bring in Canada at all?
The right hon. Gentleman spoke about the cutting of imports as if that were new. We were cutting imports during the whole of the last six years though we did it in a different way. The right hon. Gentleman also spoke about timber. That import was cut, and cut rigorously under his control. I myself happened to be the Chairman of an Estimates Sub-Committee upstairs which examined the timber trade, and with such effect that the right hon. Gentleman thought it advisable to come down to the House and say that he was going to throw the buying of softwood back to the trade.

Mr. Wilson: The right hon. and gallant Gentleman is misrepresenting the facts. If he knows anything of timber and of the situation, he will know that there was a partnership between Timber Control and the private trade. I can only


say that my decision was taken in spite of the right hon. and gallant Gentleman's report and not because of it.

Captain Waterhouse: The right hon. Gentleman is wrong again. He has to remember that his decision was taken before our report was ever produced, and while we were still in session discussing it.
I do not want to dwell too long on this matter, but I want to deal with one other point. The right hon. Gentleman cried out loudly that we were reducing stocks of timber. He knows quite well that our stocks, even after they have been cut, will be far larger than they were when the trade was within his control. What is more, I think he was wise to give up that control, and he obviously thinks he was wise for he has been kind enough to give the benefit of his great ability to that particular trade.

Mr. Wilson: The right hon. and gallant Gentleman must not mislead the Committee in this way. I did not give up the control, and if the right hon. and gallant Gentleman will ask his friends on the Front Bench he will find that the control is still there. Secondly, may I point out that as a result of the association between private trade and the timber control, stocks last year increased from 200,000 standards to over 700,000 in the course of the year.

Captain Waterhouse: That is precisely what I said. I think I am right in saying that when we had this matter before the Estimates Committee timber stocks had gone down to something like 250,000 standards. At that time the right hon. Gentleman de-controlled the whole of the Scandinavian trade, practically the whole of the trade except the hard dollar trade. We are in agreement that that was the right thing to do. It was after that that timber stocks began to be built up, and throughout the whole of the country in the timber yards one heard for the first time since before the war that buyers were getting the specifications that they wanted.

Mr. A. C. Manuel: rose—

Captain Waterhouse: No, I shall not give way, as many Members on both sides of the Committee want to speak, and I must not take up too much time.
In his very few remarks following the Budget statement, the right hon. Gentleman the Leader of the Opposition said:
Broadly speaking, this is a Budget in which there are good things, bad things and indifferent things."—[OFFICIAL REPORT, 11th March, 1952; Vol. 497, c. 1325.]
The majority of hon. Members of this Committee and of the people in the country will agree with me that the good things arise from the clear mind of the Chancellor of the Exchequer and from the fact that he was following a Conservative policy, and the bad things were necessitated by mistakes in the long period during which the party opposite were in power. [Interruption.] I know hon. Gentlemen opposite do not like it but I will give them one example, the tax on petrol.
Speaking in North Berwick during the Election on 12th October, the Chancellor of the Exchequer make a rather remarkable prophecy. He said that as a result of the Government's policy in Persia and the evacuation of Abadan, the British taxpayer might well have to bear a cost of something like £50 million. My right hon. Friend imposed this tax, which amounts to £66 million, and hon. and right hon. Gentlemen opposite are to a large extent, by their blunders, responsible for our loss of oil in Abadan and, therefore, responsible for this onerous tax in the Budget.
The Budget we are discussing—and this in a way deals again with what the right hon. Gentleman the Member for Huyton said—seems to me to have a completely new approach to our problems. The right hon. Member for Bishop Auckland (Mr. Dalton) coined the phrase which has now become a classic of too much money chasing too few goods. What happened was that he was so anxious to cut down the amount of money that was doing the chasing, that he destroyed the will to produce goods. We, in our effort today, are doing something and going some of the way to give incentives where we think it is necessary.
For the first time we are considering in this House a Budget which deals both with economics and with psychology, in this country and in the world. It deals with economics by the restriction of imports, by the remodelling of Purchase Tax and by budgeting for a large surplus.


It deals with the psychological side by giving incentives for better production at home and by giving confidence abroad in our will to put our house in order.
Money is flowing out by hundreds of millions of pounds per month. It is a position not dissimilar to that of 20 years ago. There are economic reasons behind it, and there are reasons of confidence, too. If we can do anything to restore abroad confidence in this country, we shall have done much indeed to solve our problem.
The main attack which has been levied has, of course, been on the food subsidies. We on this side of the Committee have never disguised our dislike of subsidies. Anything that makes it more difficult for the purchaser to realise what he is paying for and what he is buying is in our view wrong and bad.

Mr. William Ross: Why did the right hon. and gallant Gentleman not oppose the Agriculture (Fertilisers) Bill, which was discussed in this House last week?

Captain Waterhouse: That has nothing to do with this Budget.

Mr. Ross: It provides subsidies for the farmers. Why did the right hon. and gallant Gentleman not vote against it?

Captain Waterhouse: I should be called to order if I embarked on a discussion on that Bill. [Laughter.] I do not mind the jeers of hon. Members. I have been jeered at for so long by them that I do not care a scrap about them.
I want to deal, if I may, with a point made by the right hon. Member for Colne Valley (Mr. Glenvil Hall)—what he called Lord Woolton's pledge. I have made no reference to Lord Woolton on this matter, and the explanation I shall suggest is my own. I do not know whether he will think it the right one or not, but to me it seems perfectly good and sound. The remarks which he made in his broadcast have to a large extent been taken out of their context. I will read them. Please do not shout too loudly while I read them. Wait until I finish my argument.
Lord Woolton dealt with this matter twice in his broadcast. First, he said:
It is all of a piece with the other rumours"—

he was talking about the rumours of warmongering, about which hon. Members opposite of course no nothing at all—
that are designed to frighten you—rumours that the Tories will reduce old age pensions, that they will cut food subsidies, abolish rent control and put up the cost of living, that they will reduce the family allowances.
That was the first of his references.
The second, and last one, is that to which I want to draw the special attention of the Committee. He said:
Of course, we don't pay the full cost of our food over the counter, because of food subsidies but of course we pay for the subsidies through taxes on other things that we buy. There is the story that the Conservatives would cut food subsidies, that is not true. What we want to do is to get rid of the need for subsidising food.
That last sentence is the key to the whole. That is precisely what the Budget will do. My right hon. Friend the Chancellor of the Exchequer has brought in a great measure of Income Tax relief and he has increased family allowances and allowances in many directions. He has made it unnecessary for the bulk of the people to get these subsidies.
That is only one leg of my argument. The other leg is that the statement of Lord Woolton was made in the context of the facts at the time. Was there anybody in this House who knew last autumn that we were losing dollar currencies at the rate of £1,200 million a year? [HON. MEMBERS: "Yes."] We were told nothing of the sort. The then Chancellor of the the Exchequer made a speech in September which was alarming enough, but he never made any such declaration as that. It is a condition which has been brought about by hon. and right hon. Gentlemen opposite. If, by our present policy, we can undo the harm they did, the country will have every reason to be grateful to us.

Mr. Roy Jenkins: Will the right hon. and gallant Gentleman explain how a cut in food subsidies, used to give Income Tax concessions—by which it cancels itself out, so far as the general effect on purchasing power is concerned—can possibly be justified by the rate of the gold loss?

Captain Waterhouse: Certainly: it is the crux of the whole position, because it made the Income Tax concessions possible it thereby removes the dis-incentive


or deterrent effect of direct taxes on lower incomes.
I congratulate the President of the Board of Trade on his tackling of the Purchase Tax. I put taxes into three broad categories: the harmful, the very harmful, and the disastrous. Therefore, any alleviation of a tax pleases me. This particular tax has become extremely onerous. It was a good war tax, and the Utility scheme was a good war scheme. The former President of the Board of Trade was primarily responsible for debasing that scheme.

Mr. Turner-Samuels: What does the hon. and gallant Member mean by saying the tax was onerous: onerous on whom?

Captain Waterhouse: The tax was extremely onerous on producers of almost all high-quality goods produced in the country.

Mr. Turner-Samuels: It was necessary in order to help the people.

Captain Waterhouse: The hon. and learned Member must have a very peculiar idea of what is necessary to help anybody. I am discussing Purchase Tax, which was a necessary tax in war but became thoroughly undesirable in peace. The Utility scheme was a desirable measure when it was first initiated but it was so altered that quality disappeared. As we have heard, it no longer became a test of quality, and it was high time it went.
The boot and shoe trade is undoubtedly extremely hard hit by the proposed change because 98 per cent. of its total production was free of the old tax. I do not know how much the tax on the 2 per cent. amounted to, but I hope that it may be possible, by collaboration with the Chancellor of the Exchequer, to see whether the tax on boots and shoes, which are so necessary for every man, woman and child in the country, cannot be taken off altogether. There are other trades too to which his attention will be drawn at another time.
Income Tax revision removes that which is called, very cumbrously "the disincentive" or the deterrent to extra effort. To that extent it is wholly good, but there is one way in which I think it is not so good. It releases 2 million people from payment of direct taxes.

I do not think that is desirable. It is desirable that as many people as possible should pay some measure of direct taxation because the larger the number of people paying taxes the larger the number who want rigorous economy in Government Departments.
My final point is on economy. I applaud the Budget from every angle but if there is one direction in which we may not have gone so far as we should like it is in the cutting down of expenses. I am fully aware that time is young and that the Government have only been in office for a very few months. They have inherited a mass of extravagance and it is extremely hard to go through any Department and make all the possible economies. I know that all the Civil Estimates are not yet open to us, but in so far as they are and in so far as we can judge by the Vote on Account, it does not seem that there have been very great economies.
In one or two cases there have been actual increases of staff. In the Foreign Office the cut is only three per cent. I hope that the Chancellor will look with very great care at the Foreign Office, the Board of Trade and the Ministry of Agriculture. I assure him that if he is able to make economies in those last two Departments by cutting down the overlarge staffs he will receive the approbation and blessing of industry and the whole farming community.

7.9 p.m.

Mr. Anthony Crosland: The Committee has just heard from the right hon. and gallant Gentleman the Member for Leicester, South-East (Capt. Waterhouse), what must be the most unconvincing defence of a broken election promise that has ever been heard. To judge by the faces of hon. Gentlemen opposite, he did not seem to be carrying a great deal of conviction even there, and he certainly did not convince anybody on this side of the Committee. I do not think that he will convince anybody in the country.
The right hon. and gallant Gentleman is suffering from a very serious delusion if he thinks that the cutting of food subsidies has been made good by relief elsewhere. He seems to be quite unaware of the fact that very large numbers of the lower paid wage earners have no sort of compensation to meet the increased cost of food which they will have to pay.
One mystery which has not been cleared up by any of the speeches of hon. Members opposite today is why the date of the Budget was advanced. We had all this elaborate, psychological build-up; all this bally-hoo in the Press about what a dramatic crisis Budget it would be; and then the maestro comes along on Tuesday, weeks earlier than usual, with the flags flying and the trumpets blowing, and merely announces that he intends to raise the Bank rate—which he could do on any Thursday of any week; and for the rest he says that there are to be no cuts in civilian consumption, for these are not necessary at all. This is the crisis Budget for which the country has been prepared by all the psychological propaganda of the last few weeks.
I agree with my right hon. Friend the Member for Huyton (Mr. H. Wilson), that the Budget is little related to the national crisis, but I think there are some extremely disturbing things in it. First of all, one thing which I do not think has been sufficiently noted was the speech—if I may say so, the very verbose, rambling and platitudinous speech—of the Minister of State for Economic Affairs last night. In that speech he tried to pour scorn on the method of estimating the inflationary gap by a series of arithmetical calculations.
Of course, it is quite true that several of the calculations made last year were wrong. It is quite true that this sort of economic forecasting is still in its infancy and it is quite true, in particular, that if we have a year like last year, in which there was a great shift between the first half of the year and the second half of the year, these calculations are likely to be wrong.
But the answer, surely, is not to pour scorn on this sort of method and to fall back, as he was doing, on a kind of divine intuition. The answer is to try to improve and perfect these methods, Indeed, the logical answer, as I suspect we shall find in this country in the long run, is to have a Budget every six months and not once a year. At any rate, I should myself prefer to trust the most imperfect forecasts of the economic planners rather than rely upon the intuitive judgment of somebody like the Minister of State for Economic Affairs. I very much hope that this speech does not mean that the party opposite propose to turn

their backs entirely on the national income planning which has been developed in the last few years and, instead, to revert to the laissez faire policies of pre-war days.
A word, next, on the Excess Profits Levy. I do not think anybody on this side of the Committee would dispute the proposition that in a period of re-armament it is desirable to increase the taxation of profits, but how ironic that the Tory Party, of all parties, should choose the one method of increasing the taxation of profits which will clearly have the maximum disincentive effect and which is the clumsiest method that could conceivably have been chosen.
If we consider the effects of this new levy, we have the situation in which a company which, by its greater efficiency, has increased its profits finds that 80 per cent. of the increased profits are taxed away; whereas a company which has stagnated, and whose profits are no higher today than they were during the standard period, will actually pay less in taxation after the introduction of the new levy than it was paying before. What a marvellous incentive to extra effort and efficiency!
That is surely the most ludicrous situation we could possibly imagine. For instance, to take one example, after the new levy we shall have a situation wherein all the brewery companies in the country will be paying less taxation than they were, whereas an expanding engineering company will be asked to pay very much more. That is the most clumsy and disincentive method of achieving what the Chancellor wanted that I can imagine. Why put a high tax on marginal earnings, and decrease the tax on average earnings? Of course, the right method would have been greatly to increase the existing Profits Tax, particularly on distributed profits, and not to come along with this ridiculous new idea which shows that now the Tory Party cannot even run a capitalist economy, let alone a planned one.

Mr. James Hudson: They can run a brewery economy, though.

Mr. Crosland: I should like to say a word about the Bank rate and the raising of interest rates. In so far as this is intended to force traders to disgorge their


stocks, or intended to cut down capital investment, to release engineering goods for export or the arms drive, personally I have no objection to it; but the point about these monetary and financial methods of achieving these aims is that they are extremely clumsy, because they are completely non-discriminatory.
If we put up the interest rates it is possible that it may have these good effects. But, as one of my hon. Friends has pointed out, it may equally have the effect of increasing the number of bankruptcies in the consumer goods industries. The Chancellor of the Exchequer himself said in his Budget speech that he did not think we should gain any advantage today from increasing unemployment in those industries, but this could be one of the effects of raising the interest rates.
All these so-called financial weapons, of which the experts and the City pundits are all so fond—and which they claim are subtle, flexible weapons—are, in fact, the clumsiest weapons that we can use, precisely because they are non-selective and non-discriminating; and, even if we get one or two good results, in the process we are likely to get a lot of very bad results as well. That is why we on this side prefer, in principle, the use of controls which are selective and discriminating and which enable us to concentrate the force of economic policy precisely where it is needed.
The one thing on which I should like to congratulate the Chancellor is the fact that he resisted the pressure, which was very strong, from orthodox financial and economic circles to cut the standard of living severely in the coming year. It was urged upon him a great deal in the pre-Budget discussions from these circles, and urged upon him again and again in articles in the "Economist." the "Financial Times," and the "Investors' Chronicle," and all the rest, that Britain was still caught up in the midle of a serious inflation and that, therefore, neither the arms programme nor the export drive could be carried through without a serious cut in British civilian consumption.
I am sorry, and surprised, to see that this view received a good deal of support in the defence debate from my hon.

Friend the Member for Coventry, East (Mr. Crossman). Against this view, it has surely been clear for some time—and the Chancellor of the Exchequer accepted this in his speech—that under present circumstances, with growing unemployment in the consumer goods industries, it was nonsense to talk about general inflation and nonsense to say that the arms programme and the export drive could be carried through only by a serious cut in civilian consumption. It has been clear, on the contrary, that what these two programmes of exports and armaments would require, particularly given the steel shortage, was a cut-back in civilian investment because, fundamentally, as my right hon. Friend the Member for Huyton said, this is a problem of the engineering industries.
I suggest that in this rather curious alliance, both the orthodox banking experts in the City and my hon. Friend the Member for Coventry, East, have failed to notice the fact that in the last few months there has been a most striking change in the whole world economic climate—a striking change from a situation of world inflation of a very serious character to one of incipient deflation.
This can be seen in all sorts of ways. Every hon. Member in the Committee, on the basis of his own constituency experience, knows about the unemployment, and the growing unemployment, in consumer goods industries in 'this country. This is not just a problem in Britain. There is a textiles depression in every country in Europe. The Belgian Government take this threat of deflation so seriously that they have proposed to N.A.T.O. that there should be a N.A.T.O. conference to discuss the problem of unemployment.
It is the same with the raw materials situation. Whereas a year ago we had scarcity and rising prices, today we have falling prices and the beginning of a raw materials surplus. In fact, half our difficulties in the sterling area over the gold and dollar problem in the last few months has been not rising prices of raw materials but falling prices of raw materials. Even the world steel shortage appears to be on the point of coming to an end. If we look at the United States we find that she is at considerably less than a full employment level of industrial activity at the moment.
I suggest that the entire world economic climate has changed from what it was a year ago and that the problem is not today one of general inflation. Therefore, it is not true today that either re-armament or the British export drive need involve a cut in the British standard of life or in the Welfare State, as my hon. Friend the Member for Coventry, East suggested it would involve. I was glad that the Chancellor admitted this.
We all regret that it must involve instead a cut in civilian investment, because nobody wants a cut in that. I agree with my right hon. Friend the Member for Huyton that it is deplorable to cut down capital expenditure at home, but the Committee will note that we are cutting it down from a very high level. Investment in this country increased by £175 million in 1951 over 1950. It has been increasing steadily since the end of the war, and for the last four years it has been considerably higher than pre-war, both absolutely and as a proportion of national income, and it has been a great deal higher in Britain than in any other European country.
My hon. Friend said that in this country in 1951 the figure for plant and machinery was £300 million whereas, in fact, the figure from the White Paper is £800 million. The required cut in investment is, therefore, not of disastrous dimensions.

Mr. R. H. S. Crossman: The figure I gave was for civilian investment, and I think my hon. Friend has included armaments.

Mr. Crosland: I have taken the full figure for plant and machinery—

Mr. Crossman: I was only quoting for civilian machinery, not including armaments.

Mr. Crosland: I think my hon. Friend will find that we have not spent £500 million on plant and machinery for armaments over the past year.
The admission of the Chancellor that a cut in the standard of life is not necessitated during the coming year either by the export programme or the armaments programme is surely in itself the most damning indictment of his Budget, because the sacrifices which he has certainly imposed on a large section of the population are not necessitated by the

crisis in which this country finds itself. In other words, they are a deliberate choice of the Government, a quite natural reflection of the Tory attitude to these affairs.
Many of my hon. Friends have pointed out, with examples, how large a number of wage earners will be worse off. They have drawn attention to the fact that anybody with a four-figure income is bound to be better off. It is a curious commentary on the Tory argument about the food subsidies. Everybody knows it—food subsidies are wasteful because they are applied alike to the Prime Minister, the millionaire, and the poor people of the country. How wasteful they are; therefore, we must cut them. And what the Government do is to give an Income Tax concession which not only gives money away to the Prime Minister, the millionaire and everybody else, but gives far more money to the rich than it gives to the rest of the population. At any rate, food subsidies were not as wasteful as that.
I am bound to say also that, since the result of the various measures which the Chancellor has introduced is to make the distribution of income in Britain less equal, whereas last year it was getting more equal, it is the most extraordinary moment to do that when the country finds itself faced with a re-armament programme. Surely, if there is one time when we need to keep to the principle of fair shares and equal distribution of income, it is when we have a re-armament programme to put through.
It seems to me also a misconceived time to cut the subsidies from quite a different point of view. I imagine that Members on all sides of the Committee will agree that price stability is a desirable aim of economic policy. They will probably also agree that prices in Britain are largely dependent on the behaviour of import prices, and at a time such as last year was, when import prices were rising at a furious rate, it was impossible to aim at complete price stability in Britain since to do so would involve a level of subsidies which would be quite insupportable.
Surely, however, now, when import prices have been falling, and would appear to have reached stability for the moment—although they may fall a little further—this is precisely the moment when price


stability becomes a possible aim of policy. Yet this is precisely the moment when the Chancellor throws all possibility of price stability out of the window by cuts in food subsidies.
It is a most extraordinary time to go in for a large increase in food prices which will set the whole process off once again. In my maiden speech I criticised Sir Stafford Cripps for making an insufficiently flexible use of food subsidies, but I never suspected we would one day have a Chancellor who, facing a position when stability was a possibility, deliberately gave a twist to the spiral upwards when he could have brought it to an end.
My last point on subsidies is this: we hear an immense amount of mystical semi-religious talk about subsidies, about the need to get down to real prices. I am sceptical about this talk of real prices. The Chancellor himself cannot believe his own mystique very devoutly, because one of the things he has done in his Budget is to extend Purchase Tax over a range of goods which did not bear it before, thus breaking the link between prices and costs over a range of goods much more completely than it was done before.
It is nonsense for a Government which keeps beer, spirits and tobacco taxes at their present level to talk about the virtues of real prices. The Chancellor has made no attempt to bring prices back to this mythical real level. The plain fact is that all this talk about real prices is nothing but mumbo-jumbo and is only believed on the Tory Front Bench and by a few people in the City of London, and certainly nowhere else in the world. All this went out with Adam Smith a century ago.
I suggest to hon. Members that all we can say about prices is that any price change involves a redistribution of income and, of course, the set of price changes involved in the reduction in the food subsidies is a backward redistribution of income from the bottom to the top. That is all that has happened and it is nonsense to talk of a return to a more "real" situation.
Lastly, one word on the foreign balance. Nobody on this side of the Committee has made any attempt, as far as I know, to deny the seriousness of the present crisis in the foreign balance

However, I must disagree with what my right hon. Friend the Member for Leeds South (Mr. Gaitskell) said, and what a number of my hon. and right hon. Friends have said, on a particularly important issue, the Australian import cuts. I think we are quite wrong to blame the Australians and to give the impression that we should have gone on with the same trade situation towards Australia as we have had in the last few months.
I agree entirely that the import cuts will have serious consequences in certain industries, in the textile and motor industries in particular. Those must be taken care of by Government policy. At the same time, I suggest seriously that we should make a great mistake if we pretended that it was really desirable to go on with the enormous export surplus with Australia that we have been running in the last few months. We have been in a ridiculous situation, as the Minister knows. We have had an export surplus at an annual rate of £400 million with the sterling area and a deficit at a rate of £1,200 million with the non-sterling world. But what has the surplus of £400 million given us? It has not brought us any gold or dollars, but has merely meant running down the sterling balances.
It is about time we woke up to the fact that in the kind of situation in which we find ourselves today we cannot afford to run down sterling balances at that rate. We cannot afford to repay debt and to finance unrequited exports at this rate for the rest of the sterling area. So I suggest seriously to my hon. Friends on this side of the Committee that we should not get into a position of saying that we must go on with this enormous export surplus with the rest of the sterling area which enables them to run down their balances without bringing us any corresponding advantage. Our export problem in the next year is, partially, at any rate, a problem of switching. It is a problem with which the former Government were very familiar, of switching exports from the sterling area to the whole of the non-sterling world.
The main criticism of the Budget so far as economic policy is concerned is, as has been said from this side before, that it does not seriously help either the arms programme or the export drive.

Mr. A. Edward Davies: My hon. Friend speaks of switching to the non-sterling area. Suppose, however, that the non-sterling area will not accept our goods and that America, for example, is unable to accept consumer goods from us because of their own interests or their tariffs. What should we do then?

Mr. Crosland: I quite agree with what my hon. Friend says in the case of the United States in particular, which as he well knows, is only a tiny part of out non-sterling markets as a whole. I entirely agree that, of course, we shall find difficulties, particularly in American markets. What I am suggesting is that that should be the aim of our economic policy. It may not be 100 per cent. successful, but it should be the aim of our export policy this year.
All that the Budget does is to make for a less equal distribution of income than before, just at a time of national crisis, when the whole emphasis ought to be on equality and fair shares. Most hon. Members on this side will say that this is the sort of first Budget which they expected from a Tory Chancellor, but it is none the more agreeable for not coming as a surprise.

7.32 p.m.

Mr. John Peyton: It is with very real trepidation that I rise for the first time in this Chamber to address the Committee, and I ask the Committee to show me that indulgence and sympathy which is normally extended to those passing through this very painful ordeal. I come from the Yeovil Division of Somerset. I represent a constituency which is, in large part, at any rate, agricultural, and it is on the subject of agriculture and its general economic position that I wish to address a few words to the Committee today.
I think that the Budget has placed upon our home agriculture a heavy burden. In the first place, there are the very substantial cuts—the necessary cuts—in food imports. The responsibility upon our home agriculture is, therefore, proportionately heavier. There are the increased taxes on petrol and the increased costs, therefore, of transport, and there is the rise in the Bank rate. These must be viewed against the background of the past three years, when the costs of this

industry have risen by substantially over £200 million, £60 million of which has not been recouped.
Full consideration should be given to agriculture now. I recognise, as has been generally recognised, that my right hon. Friend's Budget is a hopeful one. It is one of incentive. I most earnestly hope that those notes of hope and incentive will be echoed in the forthcoming Price Review. That review is now taking place, and I wish to make only a few very general comments upon it.
First, I believe that the principle of the Price Review represents a sound policy. It is fair to say that in many cases it has been badly administered; it is a good vehicle which has been badly driven. The main purpose and aim of the policy behind the Price Review is the very necessary expansion of our home agriculture. The means of getting that expansion is to breathe into agriculture that extra working capital which at present is so badly lacking. The whole purpose of the policy is likely to be undermined, first, by the danger of rising costs, and second, by mistaken and sudden changes in price emphasis.
If prices are switched suddenly and without warning simply because the output of a product has reached the target which represents the nation's needs, there is likely to be a disastrous and discouraging effect upon the industry. In particular, I refer to milk, in which, of course, the county of Somerset is so deeply interested. The target for milk was reached, but in the 1951 review recoupment for rising costs was not given. As a result, the cattle population of the country has fallen, and is falling today. We are faced with a situation when dairy cattle are sent, not to the bull, but to the butcher. Such action as that undermines the confidence which is at the root of any healthy and prosperous agriculture.
I say very strongly indeed that no industry needs to much and such constant assurance as the widespread industry of agriculture, consisting, as it does, of some 350,000 individuals. The other day in my constituency, a farmer remarked to me, "We know what Governments do. They look for cheap food from overseas; and as soon as they have found it they will pull out the props from under us and let us down." I do not believe there is any


foundation whatever for such apprehension, but I am quite convinced that there is a real need for constant and repeated assurances to be given to this industry, which is so largely composed of individuals as against large concerns.
The second point which the agricultural community require, perhaps, more than anything else is some stability, or, at any rate, some progress towards stability, of costs. Instead of the business of having from year to year ad hoc price increases, can we not aim, at any rate in the long term, for stability in costs, which would give to the consuming public the assurance that prices will not go up and may well come down? This would give to the farmer the reasonable opportunity which he must have for taking the longterm view.
That could be done, I think, by administering an early stimulus to production rather than by the ad hoc price increases to which I have referred. The fertiliser subsidies and the ploughing up subsidies, introduced by my right hon. Friend the Minister of Agriculture, are two notable steps along the road to which I am referring, but such things as calf subsidies, acreage payments and grassland improvement schemes could well be considered.
Let me give just three reasons why I believe that this system of giving an early stimulant is so much to be desired. The first is that it does much to offset one of the chief difficulties of the farmer, lack of working capital. In this respect, particularly, the agricultural industry is in a very much more difficult position than any other industry. They have not got a well organised issue market to which they can resort; they simply go to the banks and their only means of capital is their revenue. In addition, the stimulant, which can be injected in the early stages of production, is valuable in that the benefit is confined to the man who is really genuinely making the very much needed effort to produce.
The third point in its favour, which I think is the strongest of them all, is that it is a first-class investment from the point of view of the nation. Instead of the results we are seeing as a result of the purely ad hoc system that we have had over the last few years, we will get a steadily increasing volume, a volume

which will increase with confidence, and with that increase in volume we shall get a reduction in overheads and the stimulant will be needed less, and not more, as time goes on.
I have been advised that the best quality of a maiden speech is brevity. Perhaps it is its only virtue. Therefore, I will conclude with a few remarks about that class of man on whose behalf I have spoken—the small farmers, the small horticulturists, all over the country. It has to be remembered that the average farm—in Somerset certainly—is not larger than 80 acres. The small farmer is a man who is patient. He has to put up with much, he is loyal, he is hard working and industrious. I would remind the Committee that he has to work a longer week than most sections of the community, even including hon. Members of this House. His normal working week is one of about 70 hours, and he is paid no overtime.
We would do well to remind ourselves that if the small farmer were working for another employer, as a farm labourer, his statutory wage would very often be well in excess of what he earns working for himself. He has no feather bed—I am not trying to be controversial—I see that the hon. Member for Wednesbury (Mr. S. N. Evans) is not in his place—but I do believe that the lot which these men have to bear is a hard one. I am not suggesting that it does not get its reward, but I do say that it is to the small farmer we in this country have to look if we are to have the increased food production upon which so very much depends.
We look to him, not as a man who is a member of a favoured class, not as a man who is in rivalry with our great urban population, but as a man who is willing, ready, and anxious to do a vital task in the interests of the country, a man whose principal aim is to safeguard and care for the land of which he is a part and to keep that land in full production and in good heart.
I wish to thank the Committee for the courtesy with which they have heard me.

7.45 p.m.

Mr. H. Rhodes: It is conventional to congratulate an hon. Member on his maiden speech and I am sure that no one has done so more sincerely than I do tonight. I remember when I made my first speech in the


House; the clock at the end of the Chamber looked as large as Big Ben—and was I not pleased when I was able to sit down!
I am sure the hon. Member for Yeovil (Mr. Peyton) can sit back for the rest of the evening and relax, because he has made a first-rate speech, and I am certain that when he speaks—as I am sure he will from time to time—on agricultural subjects in particular, representing, as he does, the town of Yeovil in that grand county of Somerset—hon. Members will listen with more than usual interest.
This is a season in which a lot of words are spoken and a lot of ideas produced. My thoughts at the moment go to the comic opera of Gilbert and Sullivan, "Iolanthe," in which the Lord Chancellor had a nightmare. One of the things which afflicted him was
A scheme of devices
To get at low prices
Of goods from cough mixtures to cables.
It is to that section of the Budget that I wish to confine myself—the
scheme of devices
To get at low prices.
I followed with interest the speech of the President of the Board of Trade. He explained his views to us very carefully and very clearly, but unfortunately he went too close to the report of the Douglas Committee and he took too many of their ideas for his own. The Douglas Committee overplayed some of the arguments that were advanced from time to time to the ex-President of the Board of Trade and myself when we were in office. One of the things that Committee overplayed was quality. On the question of quality, if I may deal with that at once, the Douglas Committee never really got down to the question of how far flexible specifications in Utility ranges had affected deliveries.
I put it to the right hon. Gentleman that in point of fact the fixed specifications have been very well supported throughout the whole of 1951, and in the absence of figures which in my view should have been produced by the right hon. Gentleman to support the contention that the quality of Utility goods has gone down, I submit some figures myself. He can tell me whether I am right or wrong. Of apparel cloth, cotton, sheetings, pyjamas and velvetings, rubber proofings and so on, I estimate that in the second quarter of 1951 8 per cent of flexibles

only were delivered in the Utility scheme and in the third quarter it was only 17 per cent. That means that there was a tremendous amount of trade in the fixed specifications through the year.
The allegation was made that there had been a lot of debasement in curtain cloths. It is easy to generalise on topics like this. During the third quarter of last year there were 33⅓ per cent. deliveries of flexibles in that Utility range. In upholstery cloths, in the third quarter of 1951, the figure was only 2½, per cent. If my figures are wrong, I should like them to be disproved.
What the Utility scheme did for the poorer and middle-class elements in this country will never be forgotten, because, coming immediately after the war, it was a stand-by for the newly-married couples who were setting up house. It provided families with goods at low prices and of good quality, and to families with young children it was a godsend. Here let me pay tribute to the personnel in the Board of Trade who so painstakingly and enthusiastically worked for the benefit of the consumer in this country.
May I ask the Chancellor or the President of the Board of Trade, or whoever is to reply to this debate, whether it is their intention to dispense with, or whether they have already dispensed with, that little, neat, tip-top unit called the Consumer Goods Service that there was in the Board of Trade, because we found it to be one of the best sounding-boards we had? Its personnel were able to go out into the country and find out what were the needs of the consumer and the quality of goods supplied, and I should like to know what has happened to them.
The Utility scheme was designed for a period of scarcity. So long as the acute sellers' market persisted, there was need of a tightly-drawn scheme. The less acute the sellers' market became, the less tightly-drawn a scheme of this description had to be, and that was why, with the need for exports looming up, as it did in the middle of last year, the flexible specifications were introduced. Even so, the volume of goods coming forward to fixed specifications was high throughout the year.
If the Committee will pardon me, I want to put on record something that I


myself believe with regard to price control schemes of this nature, perhaps it is time it was done. I disagree with my right hon. Friend the late President of the Board of Trade on one or two of these particulars, but I am now giving my own views.
The indispensable pillars in the successful Utility scheme, in my opinion, are, first, production control; second, specifications; and third, price control. Production control is necessary to direct the raw materials to the right end use, specifications are necessary to define quality by marking and price control is required from top to bottom to prevent excessive conversion costs and undue profits.
All these are necessary in a time of an acute sellers' market, and, when we have all these three pillars, we have next to make up our minds what sort of export policy we are going to pursue. If we differentiate in price between home consumption and export, we are likely to get into trouble with the overseas people, who say, if the prices are too high, that we are subsidising the home market. That is what happened in 1949, and it is a problem that has to be solved against when, as we all hope, a sellers' market returns.
In a buyers' market, a tight scheme is quite impossible. Production control is of no use, because people cannot be forced to make what they cannot sell. In regard to specifications, we cannot have in such circumstances a long list of specifications tightly drawn, and, thirdly, neither can we maintain price control in a falling market. It is just impossible, and it is a fatuous thing to do, because prices can never be followed quickly enough and a price cannot be set for the man who is keen to sell quickly. That means price fixing is behind events. It is totally impossible to put on price control with any success at all in a falling market.
In addition to this, may I pose the query whether a scheme could be designed generally which is resilient enough, if the Treasury itself cannot be resilient enough, in the application of Purchase Tax to a changing pattern of trade. There, I want to ask the President of the Board of Trade, if he is replying to the debate, one or two questions.
First, how has the D level been arrived at? I believe that this has just been a stab in the dark. I do not believe that there has been any real scientific working out as to where the D level should be. I am not going to jump in and say at this juncture that the levels are all too low or all too high, because I think we have to look at the scheme and see how it works out in practice during the next days and months. I do say that the D levels are not right to the extent that we have variable commodities to deal with, and the same prices are fixed for all the B class materials. The prices of the B materials are level throughout, and yet the variety of materials that goes into the making of these articles is very great. It is very likely that some of them will go up in price and that others will come down. I should like to have an answer to my questions on that aspect of the problem.
Another question I should ask the right hon. Gentleman, and it is a very serious one, is this: does he visualise that there will never be a sellers' market again? I ask the right hon. Gentleman again—does he visualise that there is never to be a sellers' market in textiles again? Is he hopeful? Can he give me an answer?

Mr. P. Thorneycroft: I am not a prophet.

Mr. Rhodes: May I ask the right hon. Gentleman to what extent he hopes so? What action has he or have his advisers designed for dealing with non-tax goods in a sellers' market? It could be that by devaluation or a sudden twist in the pattern of world events we could get a sellers' market instead of the present acute buyers' market in textiles. If that happened, I say that within six months there would not be a yard of Utility material in the shops. I challenge the right hon. Gentleman or his Ministry or the officers of the Inland Revenue to put up a case that it would not be so. I think it is obvious that the shops would be denuded of Utility cloths.
The right hon. Gentleman's colleagues have done the same thing again with the consumer goods industries as they did in 1920. They are forcing out into the street employees of Lancashire and Yorkshire through allowing credit restriction to go too far. I want the right hon. Gentleman to take notice of what I am


saying because this is very important. There is industrial life blood at stake here, and maybe empty stomachs in Lancashire and Yorkshire. We can sit here, and maybe empty stomachs in and worried people in Lancashire and Yorkshire today.
The action of the Government in restricting credit has made it necessary to clear out of the warehouses and the mills the cloth which has been accumulating because the manufacturers have been unable to get delivery instructions for the last few months. If one goes through the streets of Manchester on a fine day and looks through the open doorways, one can see stacks of cotton cloth. That means a shortage of money and the necessity for the small man to get new capital in order to carry on. In those circumstances, he goes in for the cloths that will cost him least in capital outlay. He will go for cloths under the D scheme, in fact there will be a concentration on that type of cloth; I heard that again this morning in the City when I went there to make inquiries.
Let nobody think that D stands for Douglas; it does not. The D scheme was the product, months ago, of some fertile brain way down in the bowels of the Treasury. The idea of the scheme was to support and encourage exports, and the exports to be encouraged, so it was said, were in that portion of the price structure known as the blind spot, the kind of vacuum that has been described.
But it will not happen quite like that because the mere fact that they are bringing down prices and are bringing competition into a smaller area of tax-free cloths will mean that they will be undoing what the Douglas Committee had in mind. The Douglas Committee said that encouragement should be given to the cloths just above the top price Utility cloths. If there is not the home trade to back the export trade in the future, what encouragement are they to give through having altered the structure of the Purchase Tax to what it is now?
I want to ask the right hon. Gentleman one or two questions about imports. Can he tell us what exactly is the position about the restriction of imports? I have heard during the last day or so that the figures about which the Chancellor spoke in his Budget speech referred to the cuts

announced in November. If there are no new cuts, does it mean that the work of the Douglas Committee has been designed to bring in cloths from abroad at much lower prices than our own—cloths from Holland, Germany, Italy and India—or what is it proposed to do? The Chancellor said there was likely to be as much consumed in 1952 as there was in 1951 Whose goods are to be consumed? Our own, or those coming from abroad? Because the principal idea of the Douglas investigation was to make it possible for those cloths to come in.
If, on the other hand, these cloths have already been prevented from coming in, due to the imposition of a quota system, why has the Douglas Committee been wasting its time on investigating how to do it in another way? Lancashire and Yorkshire are concerned about these figures. I understand that at the present time there is any amount of cheap woollen cloth in bond in London ready to come on to the market. I should like an answer on this question of imports from the right hon. Gentleman.
The Committee will pardon me, but I did have this job to do while I was at the Ministry, with regard to the specification and quality. But we shall have to watch the manufacturers here. There is no question that the right hon. Gentleman's promises are good ones; but if times are difficult and there is acute pressure through competition, a start is made immediately in debasing the quality in the cotton industry and wool industry.

Mr. Gerald Nabarro: Not necessarily.

Mr. Rhodes: I will prove it. There is in the spun rayon group of the Utility scheme, which has never had any flexibles at all, a cloth known throughout the world as one of the finest textile quality products of this country. It is Utility specification 1,005, of which millions of yards have been sold. Since Tuesday manufacturers are already being asked to debase it. If a fine cloth like that is subject to debasement within two days of the Budget, what about other more ordinary cloths.
I ask the right hon. Gentleman to get busy on this subject at once. I am sure he will, because I am sure he is as keen as anybody on preserving the standards that Utility specifications have set. I


hope it will not be long before he is able to tell the Committee what he intends to do, with the help of the British Standards Institute, about quality definition by specification.
I will not keep the Committee very much longer because I see the hon. Member for Bury and Radcliffe (Mr. W. Fletcher), waiting patiently. But I should like to ask what is to be the future of the Central Price Regulation Committee. That Committee is a body of people who have laboured so unselfishly without any pay, not only in London but also on local committees in the Provinces. They have done yeoman service throughout the country in looking after the interests of the consumer.
May I ask the President of the Board of Trade also what is to happen to himself? [Interruption.] No, I do not ask that discourteously. The right hon. Gentleman will see that on page 5 of the Budget Resolutions he has been slipped a fast one. It is not good enough, and I will explain why in a moment. The Resolution says:
(c) there shall no longer be power to define the classes of goods affected by any such Treasury order by reference to marks the use of which the Board of Trade have power to regulate;
Let me tell the right hon. Gentleman that in that little sentence, under the heading "Purchase Tax," has been sold the birthright of the Board of Trade in the matter of consumer goods. There is no question about it.
The Treasury have been aiming for a long time to get other Departments under their thumb and in this case they have done it. The Douglas scheme suited the Treasury down to the ground. By removing the Utility scheme from its previous basis, the birthright of the Board of Trade has been sold, because the Board of Trade can no longer increase prices. The right hon. Gentleman has to go to the Treasury and ask, "Please can I do something about prices?" It is an iniquitous position that the Treasury, simply because it is a revenue and tax-gathering institution, can dominate a production Department as it is doing at the present time.

Mr. Nabarro: No Department produces anything except bureaucracy.

Mr. Rhodes: The Board of Trade is a production Department; and the Treasury now have power of life and death over the consumer goods industry. They decide restriction and expansion, and the prices at which defined products shall be sold. The right hon. Gentleman smiles but he will know all about this when he is blamed by industry in the future for certain price levels, and he has to go running to the Treasury and say, "Please, please, please."
And all this, of course, is carried out by the permanent officials. They have their little bit of domination, too. One can see it in Parliament Square any time one likes. If one goes out at lunch-time and sees the civil servants who can afford to go out for their lunch—they are usually in the class who are in the running for senior promotion—one can see them passing the Treasury and genuflecting in public and crossing themselves in secret.
I repeat that under this Budget Resolution the Board of Trade have lost their birthright; and I repeat that the incidence of the D scheme is now hopelessly out-of-date. It was really out-of-date before it began, because events are moving so fast. I give the message to the President of the Board of Trade, to be passed on to his right hon. Friend the Chancellor of the Exchequer, that it is no use paying lip-service in this House by way of sympathy for the disasters which have overtaken Lancashire and Yorkshire industries if there is not a practical demonstration of assistance given from the Government Front Bench before very long by the removal altogether of all Purchase Tax on their manufactures. That is the gesture that is needed in this desperate situation. Those industries need a fillip and some help. I ask the right hon. Gentleman to pass on that plea to his right hon. Friend.

8.20 p.m.

Mr. Walter Fletcher: I have always had the very greatest respect and friendship for the hon. Member for Ashton-under-Lyne (Mr. Rhodes). To that I must now add amazement at his ability to pick the winner of the next race; because he said I should follow him and that was something not in his gift.
I agree with him on the question of the debasement of quality that may result from what comes out of the Budget, in


relation to Lancashire. As the future of Lancashire depends on continuing as a quality producer, I think it as well that his words on that subject should have some reinforcement and should be studied very carefully.
I shall not follow him further into the bowels of the Treasury. I should like to get back to the speech of my right hon. Friend the Chancellor of the Exchequer, and to the beginning of that speech, because so many of the speeches today have been devoted to the effects on the superstructure of the vessel—whether we are going to put in minor improvements here or there—and so few to the question whether the vessel will remain afloat.
The first part of the Chancellor's speech was devoted to drawing the picture of our true position. I think the compliment that was paid him immediately after his speech, when it was said that he had spoken with great clarity, is one that I have already heard paid to three previous Chancellors. To understand our situation and the remedies which are proposed, I think it would be well to go back and see what the clarity of his three predecessors has revealed.
The right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) showed a breezy optimism in his Budget speech. Prosperity was round the corner. We had the American Loan. It did not matter very much whether there were certain clauses in it which meant that most of the dollars would seep away to others. There was a carefree song in his heart. But from his finance then, and the errors of finance of that epoch, arose so many of the evils from which we suffer today.
He was followed by Sir Stafford Cripps, who had precision and clarity to a very high degree. He showed us that he could wield with skill—and, we thought, relish—the whips and scorpions of austerity. But he was infinitely too inflexible and, under that régime, we were led by his inflexibility—by what I might call his "Bed of Procrustes" mentality—into the position where events had to be fitted into his theories, rather than his theories follow events. That led us directly to inflation and, immediately after inflation before the Korean war, to a period when that great opportunity existed to stockpile, when there was no rise in commodities; there was an opportunity for

informed people—and advice was not lacking—to provide at low cost those commodities which today are the cause of anxiety throughout the country—a prime cause of the justifiable fear of some unemployment.
Then came the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell), who inherited a very uneasy and difficult job and who suffered from a strange uncertainty of deed but a great clearness in explaining the errors of others that all young economists have. Just now we had an instance from the hon. Member for Gloucestershire, South (Mr. Crosland), to whom old businessmen of a good many years' experience have listened with deep respect. But the hon. Member for Leeds, South never knew in quite what direction he was going.
The right hon. Member for Leeds, South accused the Chancellor of being a conjurer—of being not only Maskelyne but also Devant—and then he proceeded to give the next turn in the programme. It was an uneasy turn. It was obvious that his party had not yet decided its line and he was put up—because he is a skilled debater—to report the many fallacies we have heard so many times before.
But as he went on with his speech he receded, on his tight-rope, over to the left, probably because the wire was being pulled to the left by someone whose hand we did not see. The right hon. Gentleman certainly did not deal with the two real questions we have to ask about this Budget. Will it restore confidence in sterling? In other words, are we to have sufficient time in' which to put our house in order without pressure from our creditors or others; and, second, will it help the export drive, which will be, and still remains, the chief means of salvation and the chief preventative of the outflow of gold and dollars which has brought us to such a dangerous position.
Throughout this debate and from what I have read in the newspapers, I must say that I have sensed the feeling which still prevails in this country—"It can never happen here." We have got to that point of inflation when not only can it happen here, but it is not much more than a 50–50 chance that we can stop it happening here.
What can happen was brought home to me very vividly in


France. France is a country with an economic situation which is in many ways better than ours, because it produces much more of its own food. An old man recently said to me, "If I had put my money into Russian bonds in 1914 I should have lost the lot. If I had put my money into French Government scrip I should have lost 97½ per cent." That is the effect of the devalution from 22½ francs to about 1,000 to the £. It is quite clear how near we are to that form of inflation.
Hitherto this country has not known that sort of thing. We have only known a form of inflation which is so gradual that it has hardly been perceived, and we have been able, by various projects, to make it felt not as heavily as it might be. We have had some lucky breaks. We have had loans, Marshall Aid and other support from America; but now we are out in the wind of a competitive world, with a totally different sort of market for our exports. On this question of exports and exporters there seems to be a considerable degree of confusion as to who is the exporter. It is not usually the manufacturer; it is the merchant firm which has connections with countries all over the world, and if his situation is made impossible a great deal of its effort is completely negatived because the machine—the export part of our invisible export trade which is so valuable to this country—has been put out of gear.
That brings me to the question on which I intervened earlier today, at Question time—the effect of the latest steps by the Government of Australia on our export drive. Even without an incident of that sort, the export situation and the industrial situation in this country at the moment are already in some jeopardy. We have to meet the new competition from Japan and Germany. The terms of trade in the whole world have altered against us, and are continuing to alter. We have the re-armament programme, which must have a very considerable effect.
If, on top of that, we are to have the sort of unilateral action which has been taken by the Government of Australia, we must realise the seriousness of the position. We must realise that such an action will do a great deal of harm. [HON. MEMBERS: "Oh!"] It is in the

tradition of this country that a back bench Member of the Government party is doing the right thing by his party and by the House if he ventures to make constructive criticism of this sort, and in my experience in this party such criticism is not resented in any way.
In 1914, Sir Edward Grey said that the lights were going out all over Europe. Today, we say that the tariff barrier is going up all over the world—and that after a period of six years in which those who have devoted themselves to having conferences all over the world, and who were to arrange everything by planning and by international amity, have had control. We can see to what extent they have succeeded. The first breath which hit Australia, and which brought the enormous reversal in the figures, which we have been given, resulted in action of which we must take notice.
Let me say this about Australia. This country is under a deep and permanent debt of gratitude to Australia. In two wars she has sent us not only what was probably a higher proportion of her men than anyone else, but also the very highest quality of man for the Services that we received. She has been an ungrudging helper to us since the war, and on more than one occasion she has willingly and generously helped us in the contracts which have been made with her when she could have sold her produce better elsewhere.
If I make any criticism of her now, it is in no spirit of bitterness, nor do I forget all that she has done. I believe that the action which she has taken, and into which I will go in a little detail, is just as much against her interests as it is against ours. The credit standing of any country is its most precious possession, and it has taken Australia some 20 to 25 years, or even a little more, to recover from a period when her credit standing was not so high.
Australia has achieved this recovery because she has a young and able people who have built themselves up from being an agricultural community into being manufacturers to a considerable extent, and also secondary producers. But what she has done now has in it the seeds of great evil and considerable disruption.
After all, the cancellation of existing contracts is a most serious thing. It is what in private life brings a man or a firm into that kind of disrepute from


which it is difficult to recover. We discover people's real qualities in times of adversity, and nobody knows that better than we, because Australia came to our aid when we were in adversity. But on this occasion, this action of cancelling existing contracts, however great the necessity, is essentially wrong. No plea of necessity, no plea of how difficult things will be for her, no plea about the fear of increasing a tendency which she does not like, can stand against the principle of the sanctity of contracts.
We use the word "sanctity" very sparingly, but it has always been attached to contracts in this way. There has been considerable erring from the straight and narrow path in this connection, and we have always condemned it. We have been guilty of it to a slight extent ourselves on more than one occasion, but there is a distinct group on both sides of the Committee which believes that the failure to abide by the sanctity of contracts is a very bad and dangerous thing.
What is the effect? It is no good the Australian Government saying they will try to mitigate the horrors of this step, as my right hon. Friend the President of the Board of Trade tried to suggest today. It is no good their saying that they will let this fall on only that portion of the trade which is to be delivered later. In the textile industry, at any rate, if an order is received from a country like Australia, it is quite probable that by the time it has gone through the whole process which is necessary, from the grey cloth into the finished article, seven or eight months have elapsed.
It is not sufficient to say that the ban will affect only those goods for which an irrevocable letter of credit has been opened. Those are not the terms on which Australian business is done to any extent. Nearly always it is done by opening a letter of credit when the goods are ready. The shipper says, "The goods are ready; please open the credit." He has not asked for an irrevocable letter of credit seven or eight months earlier.
If that is the only protection to be offered to these people, it is not enough. If this wrong is to be put right in only a certain number of cases, it will not help

us. When the Chancellor of the Exchequer announced that there were to be cuts in the imports into this country, he was most careful to say that when he cancelled the open licences he would give a licence for all existing contracts. That gives the measure of this Government's respect for the sanctity of contracts, and the previous Government showed it in a very practical way, too.
When they insisted on the cancellation of all rubber contracts made by certain Chinese firms in Malaya with China last year, they themselves under-wrote those contracts and bore the difference between the prices at which they were made and the ruling price, which was considerable. Both sides in this Committee have shown their respect for the sanctity of contracts.
I am certain that what the Australian Government have done is inadvertent and without malice aforethought, and certainly without the idea of harming Lancashire or Yorkshire or anybody else likely to be affected by this decision. When they see the strength of feeling which has been displayed here and in this country about their move, they will realise that there is still time for a great nation—which is what they are—to show the greatest quality of all by admitting that there has been an error of procedure and by putting it right.
I have not the slightest doubt that everybody would be quite ready to step forward and say to them, "You wish to delay and to hold up shipments by arrangement between the two parties. Very well, we will help you." But that is a very different thing from a unilateral decision. I am sure that if they do as I suggest, the matter can be smoothed out, but it must be done on the basis that both parties are willing to make these changes and are willing to co-operate to preserve a trade which is of great importance to both countries.
After all, exporters were exhorted to make these contracts. At the time when most of them were made, Australia was selling her wool for gold and dollars, and it was a very proper and right move for exporters in this country to meet the needs of Australia by exporting from here. It was the sort of international trade which we encourage. But if we are to have any sort of suspicion that this respect for sanctity of contracts is not to prevail,


then international trade must and will shrink to a very great extent.
It has already shrunk considerably. There are already too many countries which have gone almost as far as unilateral cancellation by putting obstacles in the way of exporters when the contracts have been made, by not issuing the necessary licences and by forcing their central banks to refuse credits to frustrate the fulfilment of a contract at one price in the hope of getting a better price.
The lot of the exporter is very hard. He has received little sympathy and little encouragement in this or any other Budget, but when we realise that he is not necessarily the manufacturer but is the man with the connection overseas, who knows what is wanted in the country overseas, who has his office in that country and who has the personal connections in that country which are of such value, then I think it is not unreasonable to ask the Government to come to his rescue and, at the same time, to affirm a principle which they have already underlined as one they themselves hold.
If we do not attain the volume of exports anticipated by the Chancellor, then the whole of the superstructure of the distribution of benefits—and there may be some disagreement on both sides of the Committee as to whether these alleviations are properly distributed—will mean nothing at all.
I should like to turn now to certain other features of the Budget. First of all, I come to sterling balances. The hon. Gentleman the Member for Gloucestershire, South, made an interesting speech and brought out rather clearly one or two points about sterling balances. Is it really a sensible thing at the present moment to continue to send invisible exports to these countries in fulfilling sterling balances that arise from loans we received during the war? In our situation have we not got a very good right, not to alter them unilaterally, but to go to the various countries concerned and say, "We are in need of assistance ourselves. We want more time to put our house in order. We have had a greater burden thrown upon us through re-armament than we thought earlier. We wish delay in fulfilling these, to give ourselves a chance to get afloat?

Sir Richard Acland: Would the hon. Gentleman press that particular point even to the extent of postponing or slowing down the financing of the Colombo Plan, which, I understand, is financed almost exclusively by the release of sterling balances?

Mr. Fletcher: I do not press the point. The point will be pressed by circumstances. If we do not get the improvement in our trade and in the volume of exports, and an improvement in the dollar business, neither the Colombo Plan nor the unrequited exports of areas having sterling balances will be fulfilled. It will be a question of necessity and not of our wish in the matter. We wish none of these things. They are forced upon us by circumstances.
The other question is: Could not some greater encouragement be provided for invisible exports? Here comes the question of E.P.T.—or E.P.L., for the Chancellor seems to think it might be called a levy instead of a tax. The word "levy," to our ears, has a rather nasty sound. We had a capital levy. It was supposed to be once for all. We have been told honestly by the Chancellor that this is a twice or three times for all levy—possibly more. I suggest that no great alleviation can be drawn from a change of name. The Excess Profits Levy will have certain very disastrous results.
I do not complain that it has been put on; we have got to pay and those who can afford it have to pay the most. But we should look very carefully at what the result of it will be. Let there be no rejoicing on that side of the Committee as they see, as the balance sheets come out, enormous contributions made by a great many firms under E.P.L. It will mean this, and this only, that the creation of new capital, on which the future prosperity and the future safety of the country depends, will be seriously cut.
We have talked in this Committee on both sides for six years about developing the undeveloped areas of the Empire and of the world. With what? Not with Government resources. They are totally insufficient.—What have they been developed with in the past?—The accumulated wealth arising from successful private enterprises. If this is cut down, as it undoubtedly will be by the enormous incidence not only of E.P.L.


but of Profits Tax and of Income Tax, if there is no surplus over for the creation of wealth, then the lectures we have had from the other side on the duties of risk capital will come very hard..
The risk becomes so great as to be out of all proportion to the reward and I must point out on that particular point that, if we reach a certain level, at which the directors of a company are asked to take—as they frequently are—a permanent five-to-one bet on behalf of their shareholders, we retard colonial development.
We have had great developments in the past—the great copper, tin, rubber developments—out of accumulated resources. If they are no longer to be there, and if that takes place at a time when the value of money is steadily decreasing, then the necessity which we may be under to do it now will be paid for by a very sterile era which will follow in a few years time. That is quite inescapable. The incidence of E.P.L. may be particularly hard for colonial development at a time of rehabilitation after the war.
We have talked in these last five or six years about a growing partnership between labour and management. That is very desirable, but what we have got to face, with determination but without relish, is the fact that there will be great disincentive, that it will be paid for very dearly in the future.
Another question is the increase of the Bank rate to 4 per cent. Now, that again is a most disagreeable, unpalatable fact. When I first heard it I felt, "Well, is this really necessary?" Then my mind went back to the picture drawn by the Chancellor at the beginning of his speech, and I realised the desperate situation which called for an advance of this sort.
It made my right hon. Friend vulnerable politically, and, therefore, it was all the more courageous of my right hon. Friend to do it. He was called upon to do it. It was satisfactory to hear that this was not a policy dictated by the Government, but that this was a result, as it should be, of the Bank of England consulting those concerned at every phase of industry and of finance, and then taking into account the needs and necessities of the biggest user and biggest

creator of money in the country, which is the Government.
We must get away from the pattern of money rates being used solely as political means, or their being dictated solely by the Treasury. It is good to think—as, I gather, is the case from the Chancellor's speech—that we have, at any rate, regained that amount of independence in the area decried by hon. and right hon. Gentlemen opposite, the City.
Let me, in conclusion, say this. Everybody will find, as one always does, reasons for criticising the Budget; but when critics become so voluble, and so glib, and so loud, they should pause for a moment to ask themselves this question: Will this Budget fulfil—and I come back to where I started—its main functions? Will it permit us to get through the extremely difficult period ahead without wrecking ourselves in the process?

Mr. W. Nally: No.

Mr. Fletcher: The hon. Gentleman says, "No," by which, I presume, he is an advocate of even more stringent measures, as that is the only possible alternative.
To me the outstanding danger is that the Budget may be a little bit too optimistic in judging what can be achieved by exports. It is not, in my view, a problem of productivity. This country can and will produce. The question is whether we shall be able to sell, and whether, if every country adopts this tariff war policy, this self-sufficiency line, we in this country, with our exceptionally vulnerable position, will be able to carry through our intentions.
However, the confidence which has been generated in other countries in the two days that have elapsed since the Chancellor announced his Budget must be a great source of strength and consolation to him and his colleagues and to every one of us.

8.51 p.m.

Mr. Frank Tomney: The hon. Member for Bury and Radcliffe (Mr. W. Fletcher) has talked this evening in somewhat of a different vein from that which he usually adopts, and I think that some of the things he says find acceptance on this side of the Committee. I share his apprehension


with regard to productivity and also with regard to the Bank rate.
During the last few days, the various aspects of the Budget debate have followed the conventional pattern with regard to its effect upon industry, exports and commerce. The Budget is once more to be regarded as an instrument by which we calculate and formulate the economic policy of the country for the ensuing 12 months. The practical thing about it is that if it is a measure of what we may expect from further Budgets while the Tory Government are in power then, indeed, both industry and commerce and the workers in this country have something to look out for.
In the last analysis, this Budget and previous Budgets depend upon the productivity capacity of the nation to procure the wealth and services by which the nation must survive in free competition with other nations of the world. As a result of the Budgets of the Labour Government, we were beginning to see the development of economic policies which would put us back as a producer nation in the markets of the world. Now the burden of re-armament has been placed upon us—which I for one accept as a necessity—and it not only upsets the plans of previous Governments but will also fall heavily on the Government now in office. We cannot deny that, and it would be wrong for us to do so.
The sellers' market, which is constantly diminishing, and which we held chiefly in regard to quality and price, will be still more difficult to maintain in the coming years. The restrictions on credit and capital investment, due to the rise in the Bank rate, have put upon us an additional risk which we should be wise to look at, and prepare future plans for dealing with it. Make no mistake about it, the position with which we are now faced as an exporting nation as the result of restrictions on credit and, indeed, the suspensions of import licences, is something which will affect us considerably.
The position of the small manufacturer will be extremely difficult, because he cannot hope to compete with the large industrial and financial houses in obtaining credit, for the banks will support only those who are the best risks, and they are generally those people with capital in the form of large buildings and plants.
The Budget has been called a rich man's Budget. It is certainly not a poor man's Budget or a middle class Budget, for both those sections of the community have been hard hit. We should do an injustice to ourselves if we did not look most urgently at the effect of the long-term programme for the suspension of the import licences for machinery.
The Labour Government were most insistent about the provision of capital for investment. The economy and material life of Great Britain was founded chiefly on the steel industry, and in 1946 the Labour Government ploughed back £16.6 million into steel development, in 1947 £23.7 million, in 1948 £33.2 million, in 1949 £45 million and in 1950 £50 million. All that was an encouragement to industry to expand and to capture the world market by which we live, and the export figures prove that industry responded in a remarkable manner. Will all that go? If it does, we shall be in a very difficult position.
The position is the same in the case of the value of machinery imported on duty-free licences. In 1945–46 the figure was £2.79 million, in 1946–47 £5.4 million, in 1947–48 £12.9 million, in 1948–49 £22.2 million, in 1949–50 £50 million and in 1950–51 there was a fall to £16.1 million.
It is only on the basis of imported machinery under the licences which are available, and the development of industry by new machinery and methods, that we can hope to survive. We cannot hope to compete with the United States, where the capital investment per man is five times greater than in Great Britain.
Before long we shall be faced with German competition in every field of industry. We are today faced with Japanese competition in textiles. That has grown at such a rate that the Japanese have attained the output figures which Lancashire attained in 1947. Between 1920 and 1938, the Lancashire industry was suffering from under-capital development, and that was the time when we should have been modernising and re-capitalising. No matter what we do now about capital development in the textile industry, we can never catch the Japs, because they can always live cheaper than we can.
That is a very sorry position for one of the main industries in Lancashire and


Yorkshire. The majority of the workers in the industry are trained in that craft and cannot quickly be transferred to other industries, including armaments. This state of affairs will cause us great concern in the next few years.
Quite frankly, unless we have expansion and capital development in Lancashire with new machinery and new methods, on the basis of competing not solely in those goods at which Lancashire is good, but in the general mass production lines which are now being made in Pakistan, Japan, and in some cases in the United States, where weavers in some cases are looking after 20 to 40 looms, we shall not be able to hold our own in the world. That is what we have got to do, and this Budget, in my opinion, does not help us.
I want to say a word about coal. As is well known by my hon. Friends who have been associated with the coalfields, the mines in this country were neglected during the inter-war years. There was very little capital development during the years when it was needed. If we could lay our hands on 30 to 40 million tons of coal today, most of our problems would be settled. Are we to understand that the import under free licence of machinery for the coal mines is to be suspended in accordance with the policy announced by the Chancellor yesterday? If that is so it will be a grievous thing.
This industry needs new machinery as quickly as it can get it. It may well be that men will be out of work in certain parts of the country and they may seek other avenues of employment, as men will do rather than be unemployed. It is quite possible that they may desire to assist in the coal mines. What will be the position if men apply for work and cannot be used because of lack of machinery, such as coal-cutting machinery? I know that the Chancellor said that the needs of industry would be considered carefully, and I hope the position of the coal-mining industry will be because it is an important question for it.
Those things which impinge upon the production of the country are more important than any other aspect of this Budget, because, willy nilly, this Government or a future Government has to use, conserve, direct, and extend the productive capacity of the nation. A nation of over 50 million people has to export more

and more to live. During the last six years we had a lead in this matter to which the nation responded. When the urgent appeal of armaments dies down, that will be the testing time, and if the machines are not available we shall be in a very serious position indeed.
In Germany this year the steel capacity will be greater than the steel capacity of Great Britain. Germany is the natural leader of Europe in ingenuity, skill and engineering ability. It will quickly regain its former position in the world. We have to compete with all these countries when our only primary raw material is coal. Therefore, no matter what decisions have been or are to be made about the import of machinery under free licence, the coal-cutting machinery and the coal-mining machinery must not be stopped. It is something we cannot contemplate and something which every Member of the Committee should be prepared to advocate to the Government.
I am trying in my speech to be a little different from some of the speakers whom we have heard. There are one or two other things mentioned in the Budget with which I should like to deal. For instance, I am sorry to see the cutting back by £3 million of the money for the Development Areas. These areas were a blot and a stain upon the social conscience of this nation in the years before the war.
All Members of the House should be concerned to see that unemployment does not return. No matter what we think collectively, it is not nice individually to see our fellow countrymen suffer, and there is no worse degradation than the degradation of poverty which unemployment brings. I know from personal experience. I was on the means test in Lancashire with 4s. a week, the price of a packet of cigarettes today. Because of wrong economic policies I was thrown on the scrap heap. I know how it feels. It is soul destroying.—It makes scars on a man's soul for the rest of his life.
The proposed £7 million reduction in the Ministry of Supply Vote for giving assistance to industry should not be allowed. Such things are the very essence of our economic life. I know that hon. Members cheered the Budget when the Chancellor sat down because he seemed to have fulfilled some of their election promises, but on closer examination we know that it is not so.
During the last six years we in the trade union movement have done a good job in guiding and restraining workers in regard to wage claims, in explaining the position of the Government and of the country, and keeping peace in industry. It will be awfully difficult to keep peace in industry in the future if we are to be faced with widespread unemployment. I ask the Chancellor and the Minister who is to reply to note that in the last analysis the electorate call the tune. The Budget's effect can be examined now, but its after effects will be felt in six months' time and it is then that people will begin to understand it.
I ask the right hon. Gentleman to look, in the interim period, at some of the things which I have said and to realise that it may be false economy to do some of what is projected. The position is exceedingly serious and I can go all the way with the opinions which some of my hon. Friends hold. We must go forward, despite the difficulties, but if we cut the things which I have mentioned we shall find ourselves back in the backwoods of despair that this country knew in the years gone by. I ask for full consideration of the points which I have raised.

9.8 p.m.

Sir Edward Boyle: We have listened to a very sincere and well-informed speech from the hon. Member for Hammersmith, North (Mr. Tomney) and I am sure that every Member of the Committee heard it with close attention. The simplest answer to the hon. Gentleman's main point is this. He says that if we cut our capital investment down and do not import sufficient machinery we shall be in a very serious situation; but we are already in a very serious situation, and that is the justification for certain measures which the Chancellor has taken.
I am sorry that the hon. Member for Gloucestershire, South (Mr. Crosland) is not in his place. He made an extremely interesting speech, to which I should like to reply in full, but perhaps as he is not here I may refer to just one point he made which is of great importance. He said that we must be prepared, when the rearmament programme begins to taper off, to be faced with a general world depression. I think that is true. But the experience of the last few years shows how

difficult it is to foresee the economic position even a year from now.
I have long felt the truth of the view expressed by the late Professor Sir Hubert Henderson in his Rede lecture—I am sure that everybody, on either side of the Committee, who knew of his work will regret his recent death. He said that economic planning is very difficult because it involves looking beyond the immediate present. That is very true. It really is impossible to forecast what will be the economic scene a year from tonight.
For the second year running the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell), has done me the courtesy of listening to me in a Budget debate. Before I get on to my main point I must reply to one of the things that he said yesterday and which is of very great importance. He asked:
Is it perhaps
that hon. and right hon. Gentlemen on this side
hope somehow or other to deal with the problem of the wage-price spiral by curtailing demand and producing enough unemployment to fortify employers in rejecting wage Increases and weaken the trade unions in claiming them? "—[OFFICIAL REPORT, 12th March, 1952; Vol. 497, c. 1414–5.]
My answer to that question is exactly the same as that which I gave a year ago. That is absolutely not the intention of hon. and right hon. Members on this side of the Committee. Indeed, in normal times I am sure it would be the hope of all my hon. and right hon. Friends that an increase in the value of the total volume of national production should always be accompanied by some increase not only in money wages but in real wages as well.
It seems to me that when one is considering a Budget it must be seen against the background of the general economic situation. I wish, so far as I can, to avoid repeating what other speakers have said, but there are obviously three important factors which we have to take into account today. First and foremost there is the grave position of sterling. As the Chancellor said in his Budget speech, our gold and dollar reserves
are the foundation on which is built the whole structure of trade between the sterling area and the rest of the world."—[OFFICIAL REPORT, 11th March, 1952; Vol. 497, c. 1274.]
I think we can go a little further than that. Until sterling is strong once more, Great Britain can never play its full part


in helping to secure a stable world peace. My hon. Friend the Member for Carlton (Mr. Pickthorn) once said in this House that when anyone utters a sentence beginning with the words, "History teaches us," one can be sure that he will say something very silly. Notwithstanding that remark I do think history teaches that no country with a weak currency has ever played a worthy role in international affairs.
Secondly, our economy today is overloaded so far as capital goods and the investment programme are concerned. We certainly have not all the resources we require for investment at home, for the export of capital goods and for our defence programme. I shall have something to say in a moment on the question of increasing the Bank rate as a means of checking capital investment at home. It will certainly be a hard task for our exporters to increase the total volume of our exports next year by £50 million. I am glad that the Chancellor has recognised this and that my hon. Friend the Member for Bury and Radcliffe (Mr. W. Fletcher) emphasised it just now.
Thirdly, we have to consider the serious recession in the textile industry. Obviously, the sellers' market in consumer goods was bound to come to an end some time, and on consulting the March number of the "Bulletin for Industry," which is not exactly a cheering document, I find that in the third quarter of last year the personal consumption of household goods and clothing was between 15 and 20 per cent. less than a year ago.
In this connection we on this side of the Committee are entitled to draw attention to the disservice rendered to the textile trade by the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) shortly before the Election. There is no more certain way of inducing a recession in any industry than by persuading a large number of people to postpone their purchases. I cannot help thinking that the right hon. Gentleman failed to draw a distinction between, for instance, carpets, where the raw material is worked up into a finished product in a short time, and other textile goods where it takes much longer before the raw material has been fully worked up.
That is the situation as I see it, and it is against this situation we have to consider the proposals of the Chancellor. In

the first place, I believe my right hon. Friend is to be warmly congratulated on having at any rate pursued a clear cut budgetary policy. I do not think it could be said of this Budget, as was said of the Budget of Sir Stafford Cripps two years ago, that it was a thing of shreds and patches.
The Chancellor has made two major decisions. First, he has decided that home investment and the claims of Government expenditure on real resources must be cut in order to make room for increased exports and for the defence programme. He has decided that this is a year in which we as a nation must live on our own capital to a considerable extent, and it is in accordance with this same policy that the reduction in imports is to be partially offset by a reduction in our stocks.
I believe that this decision was the right one in view of the overloading of our economy. The Chancellor himself pointed out that it was a short-term decision when he said:
In the long run our factories must have the equipment they need for expansion and the improvement of efficiency."—[OFFICIAL REPORT, 11th March, 1952; Vol. 497, c. 1283.]
I believe that in the long run the whole question of taxation as it affects industry will have to be most carefully considered. In the short run, however, I do not believe that the Chancellor can fairly be criticised for his policy.
I turn now to the thorny question of the Bank rate. As I see it, there are two main advantages in having put up the Bank rate. First, it will certainly convince the outside world that we intend to defend sterling and to stem inflation due to excess of investment over savings. The right hon. Member for Leeds, South, said in his speech that the higher Bank rate would not deter those who still thought that the £ would be devalued. Surely the answer to that is that the very decision to put up the Bank rate to 4 per cent. will help to convince a very large number of people that we do not intend to devalue the £.
Second, as my right hon. Friend the Minister of State for Economic Affairs said last night, the putting up of the Bank rate
should induce a more cautious approach to the financing of capital investment—including unnecessarily large stocks—on the part of everybody."—[OFFICIAL REPORT, 12th March, 1952; Vol. 497, c. 1500.]


That, of course, is not a new argument. I rather think that it is the argument which has been especially associated in the past with Professor Hawtrey. I was reading the other day Mr. Manning-Dacey's recent book on the principles of banking, and I thought I recognised something of Professor Hawtrey's argument in what the Minister of State for Economic Affairs said last night.
It is the old argument that interest changes constitute an important element in the cost of carrying stocks of goods against borrowed money, and that a rise in short-term rates will mean a falling off in replacement orders and, thus, a slowing down of economic activity. I thought it was common ground among most schools of thought today and among most economists that variations in working capital were more important than some earlier economists had supposed.
I see that the hon. Member for Gloucestershire, South, is now in his place. I listened to what he said about monetary controls working in such a haphazard way. I should have thought that there were several answers to this. For one thing, monetary controls bring home to the individual the need to economise more effectively than any other sort of controls. For another thing, there is always the difficulty, as Professor Lionel Robbins suggested in his Stamp lecture, that physical controls are apt to be behind the gun. They seldom work as promptly as monetary controls. There is also the point that physical controls will never work effectively unless monetary policy and financial policy are both working in the same direction.
For all those reasons, I should have thought that to say we could get on today without monetary controls, was to make a rather sweeping statement, although I certainly listened with great care to what the hon. Member had to say.
The second decision of the Chancellor was that civil consumption this year should remain stationary. That decision has surprised a number of people, but I quite understand that in view of the recent recession in the consumer goods industries the Chancellor does not want to depress home demand any further. Even so, in view of the very heavy cut in imports that has been made, it will

be surprising if there is not some tendency for goods which ought, perhaps, to have gone for export to be sucked back into the home market.
The full effect of the import cuts has not yet been felt, and I am sure that we shall only be able to gain the full benefit of these cuts, so far as our balance of payments is concerned, if every encouragement is given during the coming year to personal savings. I am not sure that we in the Committee always realise or appreciate sufficiently the enormous amount of work that is being done by volunteers in the National Savings Movement.

Mr. Edward Davies: In that respect I agree with the hon. Member, but would he suggest that there should be some encouragement given to the small saver? Would he favour the view that the interest rate might be scaled up now, in view of the new value of money?

Sir E. Boyle: I certainly agree with the hon. Member and it was a point I had thought of making myself, but, as I thought there would be a lot of hon. Members who would wish to take part in the debate, I felt I should cut down my speech.
Finally, I come to the controversial subject of food subsidies. I do not want to repeat too many of the arguments which already have been canvassed. I think that as a result of this debate we already know the lines on which controversy over this subject will be carried on, both here and in the country. But I do think that hon. Members opposite, when arguing this question in their constituencies, really must say what will be the effect of this Budget, considered as a whole.
I quite see the force of the point made by the right hon. Gentleman that it would have been possible to increase family allowances out of the petrol tax, and that the switch between food subsidies and Income Tax reliefs can be considered financially as something separate. For all that, people in the country will want to know how they will be affected by the Budget as a whole; and it is only fair to take into account the effect of the increased family allowances, particularly in view of the fact that in two consecutive party manifestos we have said—and the same point was made by my


right hon. Friend the Member for Warwick and Leamington (Mr. Eden) when he propounded our policy in this House—that if there were any reduction in the food subsidies, some compensation would be made in increased family allowances at the same time.
Whatever the noble Lord, Lord Woolton, may have said on the wireless, I have a clear conscience on this matter. Indeed, one of the principal weapons of my opponents at two consecutive Elections was an article I contributed to a university periodical in which I stated something about cutting the food subsidies. The hon. Member for Dunbartonshire, East (Mr. Bence), knows that, and no doubt the hon. Member for Perry Barr (Mr. Poole) would also remember it if he were here, as he read it aloud to an audience of three men and one Conservative worker on a very wet Sunday afternoon.
We heard from the hon. Member for Gloucestershire, South, on the subject of fair shares in connection with the food subsidies—

Mr. Frank McLeavy: Before the hon. Member passes from the food subsidies, may I ask whether he now repudiates the definite assurance given by Lord Woolton, on behalf of the Conservative Party, that food subsidies would not be reduced?

Sir E. Boyle: I am not intending to pass from the food subsidies—my last point is also concerned with them—but I do not think I, as a humble back bencher who has only been a Member of Parliament for the last 15 months really am qualified officially to repudiate Lord Woolton.
My answer to the point about fair shares is that fair shares and equal shares are not the same thing. The whole purpose of this part of the Budget, surely, is to enable as many productive workers of this country as possible to benefit from the results of their extra efforts. It had become clear by this year that it was impossible to make significant reductions in direct taxation unless some reduction was made in food subsidies as well. One of the most important figures in the Chancellor's speech was the estimate he gave for increased production. This, indeed, was one of the estimates which "The Times" fairly described as "hopeful."
But we badly want an increase in the volume of production, at least as great as the increase last year. We must make the fullest use of manpower, materials and machinery at our disposal; and for those reasons it is essential, to make changes in the incidence of Income Tax, so as to encourage as many people as possible to put in extra hours, and to make them feel that they were not getting into a higher tax bracket through doing overtime work.
There is no question that in the past, the way in which Income Tax scales have worked has discouraged many people from undertaking extra work. Also, the Minister of State for Economic Affairs made a very good point last night when he said that higher prices increased the weight of taxation without the rates actually being raised, because if incomes rise in proportion to higher costs they automatically come into a higher tax bracket.
To conclude, this is the first time for many years that there really has been a significant reduction in direct taxation. I hope it is a sign that my right hon. Friends are not prepared indefinitely to put up with a system whereby 40 per cent. of the national income is disposed of by the Government. I hope that this Budget is only the beginning of a process of letting fresh air into the economy—a process that can be hastened when the back of the re-armament programme has at last been broken.

9.25 p.m.

Mr. Norman Dodds: Because I have given an undertaking that I will sit down by 25 minutes to 10, I will make my comments as briefly as possible, and without reference to the speech to which we have just listened.
Before making the point for which I have risen, I should make a passing reference to the statement made by the Chancellor of the Exchequer in justification of reducing the food subsidies. The right hon. Gentleman's main point was that the food subsidies were going to all, whether the people needed them or not, and, therefore, the Government were going to give them to those who had the greatest need. It was a matter of some amazement to me that he should have said that. Is it not a fact that millionaires or rich


people with children can benefit from the family allowances and the subsidies, and is it not also a fact that there are some very rich old age pensioners?

Mr. Charles Ian Orr-Ewing: rose—

Mr. Dodds: I cannot give way; I have only 10 minutes, and I have risen to put one viewpoint in that 10 minutes. I speak on behalf of the Co-operative movement, and on behalf of millions of people in this country who have a point of view on this new Utility scheme. Tens of millions of people will be reading in the evening papers tonight and the morning papers tomorrow about a new Utility scheme, and they will probably read the words of the President of the Board of Trade, who said that it is a better one for the lower income groups.
That is a fantastic claim to make. The Co-operative movement appreciates that the old Utility scheme was full of holes, and that one could pull it to pieces, but there is not the slightest reason why we should rob the lower income groups of some of the blessings still to be found in it.
We in the Co-operative movement were attracted by the idea of a new scheme. We must find out what its effect will be, however. In reading the Douglas Report, I found that it made reference to the disparity between some of the percentages on goods in the Utility range. For instance, furnishing fabrics, 50 per cent.; cotton and linen, 84 per cent.; pillow cases, 77 per cent.; and sheets, 83 per cent. If the new scheme is likely to be accepted, it will mean that, in the case of pillow cases and sheets, there will be a terrific amount to be transferred to liability to Purchase Tax which previously was in the Utility range and free of taxation.
My hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes), who speaks with a great deal of knowledge on this matter, went very far in some of the statements he made, but he did have a little caution when he said that we would look round and find out what the new scheme meant. I speak for the Co-operative movement, and I say that the managers met last night and again this morning to see what the actual effect

will be, and the result of their investigations makes it possible to indicate some of the weaknesses in the scheme.
My hon. Friend the Member for Ashton-under-Lyne said that the D level might be too low. The experts are absolutely certain that it is much too low. For instance, in the case of nightdresses—and it does not take an economist to know this—we see there is the figure of 15s. per article. This is much too low. There is no distinction between wool, cotton or rayon garments, despite the considerable variation in cost of production. Of course, it might be that my hon. Friend the Member for Peckham (Mrs. Corbet)—who has one of those girlish figures—might be able to get one free of tax, whereas my hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock) would find it was not possible to do that. Therefore, the new scheme will tax one person more than another in consequence of the physical dimensions of the citizen.
In the case of men's shirts, the proposal is that any above the price of 17s. 11d. will be taxed. As as result people in the lower income groups will now have to pay Purchase Tax on shirts for the first time. There is no doubt that the burden is being transferred from the higher income groups to the lower income groups. Women's shoes up to the price of 37s. are to pay no Purchase Tax. The figure should be no lower than 45s. We in the Co-operative movement have no doubt whatever that as time goes on people will realise that once again they have been robbed of the benefits of the old Utility scheme. It is completely fantastic for the President of the Board of Trade to claim that once again the present Government are looking after the lower income groups.
Under the old scheme a non-Utility fur coat costing £100 was previously liable to 100 per cent. Purchase Tax, making the total price £200. Under the D scheme, the first £6 10s. is exempt from tax, leaving £93 10s. taxable at 100 per cent., thus making a final price of £193 10s. But a Utility fur coat costing £20 was liable to Purchase Tax at the rate of 33 per cent. making the price £26 6s. 8d. Under the D scheme the same exemption from tax—£6 10s.—will apply to the £20 coat as to the £100 coat. The final price of the £20 coat will thus be £33 10s—It is


typical of the whole scheme that the more expensive coat will be £6 10s. cheaper under the new scheme than under the old scheme, whereas the £20 coat will be £7 3s. 4d. dearer.
When we come to the other stages of the scheme, we shall have more to say. I will conclude by saying that the business men who have looked at the D scheme believe it to be an example of the bureaucratic mind which has an ambition for tidiness without regard to its sociological effects.
As to the fixing of the D limit, we should like to know how and when that limit is moved up and down. Since it is now under the control of the Treasury we anticipate that it will require legislation but if it is done by an Order it may be abused. It is our view, from what we have already seen of these Budget provisions, that this is once again a case of re-distributing wealth whereby the rich become richer and the poor poorer.

9.35 p.m.

Mr. Ian Horobin: I hope that the hon. Member for Dartford (Mr. Dodds) will not think me discourteous if I do not follow him, especially as I am an old Co-operator, but perhaps I, too, can see him outside later. I want to bring the debate back, at the end of the second day of discussion of what is admitted to be one of the most important Budgets of recent times, to the main question on which it has to be judged, namely, whether it effectively deals with the inflation which, if not checked, will destroy our savings, our businesses and our employment.
I will try to tidy up the figures and relate to each of them some of the points made in this debate, because I think I shall have very little difficulty in persuading the Committee how "close run" are the Chancellor's estimates and how little margin there is for error. And if I can show the Committee that that is true it is quite useless for hon. Members opposite, or even for hon. Members on this side of the Committee to claim that some of the benefits are not big enough or that some of the cuts are too severe unless they are prepared to show what they will give up.
We start with the external account. The Chancellor took as his figure of what

ought to be the rate of improvement in comparison with the whole of last year as £600 million. The right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell), though he knew better, pretended to be confused about how that was related to the £800 million which was of course the annual rate at the end of last year. But I repeat that the £600 million is the figure at which we have to put the improvement compared with the whole of last year.
The Chancellor allowed £200 million odd from an increase in invisibles—which none of us is in a position to check—and from an improvement in the terms of trade and a number of hon. Members have pointed out that to allow anything substantial for an improvement in the terms of trade is, to say the least of it, risky. Although we have a little in hand still compared with last year's average, the terms of trade are now moving against us.
The Chancellor allowed £300 million-odd for cuts in imports. Nobody liked that. All agree that if we could have done so we should have made a smaller cut. For the balance we want more export trade and the Chancellor allowed £50 million extra, making up the received total of £600 million improvement. Everybody has pointed out the position in the textile industry and the position in Australia and that to allow even this comparatively small figure of £50 million extra for exports is a doubtful proposition. It has also been pointed out that most of those increased exports can only be in capital goods.
The result in that part of England which I represent is that manufacturers of engineering products in one half of the constituency are busy putting industrialists in the other half out of business. To sum up, so far we have only made up the required figure of £600 million by a series of steps none of which we like, and are by no means assured.
We now come to the home account. Taking the above figure of £600 million with which the Chancellor stated he felt we should only have to find, £400 million as extra claims on our current home resources. He only allowed for £150 million less imports available for consumption because, as he pointed out, he had run down stocks. Nobody likes to run down these stocks. They ought not


to be run down and the Chancellor has at least nothing to spare there. We have also to provide the £50 million for the extra exports, making £200 million so far.
The balance of the £400 million, namely £200 million, is all he has allowed for an increase in armaments. Everybody admits they are increasing too slowly—at least everybody on the Front Bench opposite and as many of their followers as they can persuade to agree with them and everybody on this side of the Committee. Nothing is allowed for supplementaries. It is, therefore, quite useless for hon. Members opposite to say that the Chancellor has understated his problem. How does he find this £400 million? He has allowed for a balance of £250 million from extra production, as last year. Everybody agrees that that is doubtful, and there is, moreover, a possibility of a mistake here, because in so far as an increase in production does occur and in so far as it occurs by extra overtime, the production generates its own extra income and does not assist in cutting away inflation. He therefore has nothing to spare.
That allows him £250 million out of the £400 million. He allows £50 million less for civil Government expenditure and here, I confess, he has perhaps for the first time been cautious. The money value has been cut and prices have gone up; and I should think he has a little in hand. Whether or not he has, everybody on this side of the Committee agrees that the present expenditure is too high and if the cuts could have been bigger they should have been.

Mr. Douglas Houghton: May I ask the hon. Gentleman if he would care to make any suggestion?

Mr. Horobin: I was trying to sum up. I am defending the suggestions of the Chancellor of the Exchequer and explaining to the Committee how they must hold the field until the party opposite is prepared to show what they will give up. My argument is directed to show that the Chancellor has done his best at every point, even to the point of taking risks in under-estimating rather than over-estimating what is required of the country.
So far, we have found £300 million out of the £400 million which is his figure of

required extra resources. He finds the remaining £100 million from investment cuts. Everybody dislikes these cuts. We realise we should be re-equipping and most people also realise that industry has been living on its capital in recent years and has not been adding to its capital to any appreciable extent. It is quite clear that the balance sheet as presented by the Chancellor does not err on the side of being over-severe. He has nothing to play with on either side of the account.
We shall have the opportunity of discussing the Excess Profits levy later at great length, but it really is ridiculous for hon. Members opposite to pretend that this is a Blass Budget, if they realise that on all distributed profits over a very bad standard year the Chancellor proposes to take 95 per cent.
Lancashire is one of the parts of the country which is very heavily hit by this Excess Profits levy. It would hardly be possible to find three years which will damage Lancashire more than this. It is only on this basis that the Chancellor has been able to say that the resources available to home consumption this year will remain roughly the same as they were last year. If there are to be no further rises in prices it means that we have to keep incomes about the same as last year.
Once again I think I shall have little difficulty in persuading the Committee that the Chancellor has erred, if at all, on the kind side. He pointed out that to buy the same amount of goods would require about £400 million more this year than last. We can add to that £400 million very nearly another £100 million in effective deflation from insurance contributions and food price rises which would have occurred above the old ceiling of subsidies. That means that he has £500 million to play with. But last year personal incomes went up by £900 million and they were going up faster at the end of the year than at the beginning. That suggests perhaps £400 million of extra purchasing power to buy the same amount of goods.
I think it extremely improbable, on the figures we have so far, even if we agree—with some diffidence, as I have shown—that real resources will remain the same next year, that nevertheless there will not be more incomes chasing those same real resources and that we


shall not, therefore, still have some inflation, which is what we are trying to stop.
If there is any error, it is not on the severe side and it is, therefore, to show oneself completely out of touch with the realities for hon. Members opposite to start saying that 10s. for war pensioners is not enough and things of that sort. [HON. MEMBERS: "Who said so?"] Well, it was argued by at least two hon. Members opposite.

Mr. Crosland: rose—

Mr. Horobin: I cannot give way. I have not referred to any hon. Member by name, and I must get on. The next point which I think we have to bear in mind is that all these figures are extremely doubtful, and if we err at all we must err on the right side. The Minister of State for Economic Affairs pointed out the grave errors in the estimates which the late Chancellor of the Exchequer made last year, and I will take the point further—and I make no complaint about the late Chancellor of the Exchequer, for I am quite certain that his figures were made in good faith and on the best available advice.
The point is, not that I complain about these errors but that the whole system of trying to add up at the beginning of a year in the Budget and leaving everything else to rip is completely impracticable. [Interruption.] I will tell hon. Members. Apparently they did not listen to the Chancellor, and so I will tell them. The Chancellor of the Exchequer told them quite clearly.
The figures, then, are very doubtful, and in proof I will add a third mistake made by the late Chancellor of the Exchequer. He estimated last year that private and corporate savings would go up by £170 million, and in fact they went up by less than £50 million. I am not complaining of his mistake at all; it only shows how impossible it is, with the best will in the world, to make elaborate calculations of this kind except with a huge margin of error. If we are to err this time, therefore, we must err on the side of making sure that we have at least done enough.
The next point we must bear in mind is that some of these savings have been

achieved by capital cuts which cannot be repeated. Moreover, re-armament expenditure must increase next year. Beyond that, there is the question of what foreigners will think we have done, for it is almost more important that foreigners and owners of large balances in London should feel we have done enough than that, in fact, we should have done enough.
I want to draw the attention of the Committee for a moment to some very significant figures arising out of E.P.U. Last winter, and in the early part of last summer, we were sitting very pretty and piling up very big settlement balances, but it has not been sufficiently appreciated—and I have the figures here, although I will not weary the Committee with them—that during all the months in which we were piling up surpluses with E.P.U. the balance of trade was against us. We gained our surplus because more and more people were leaving money in London because they thought London was a good place in which to have it.
On the contrary, in the last few months, as far as any figures are available, it appears that the trade and invisibles of the sterling area with E.P.U. roughly balance, but we have been about 900 million dollars in the red for exactly the opposite reason—everybody who could get out of London was getting out of London. Thus, the figures will show to anybody who is prepared to consider them that it is of vital importance in this problem that we should satisfy the world at large that we have done enough, and I have tried to point out to the Committee that if there is any doubt in the matter at all, it is that we may not have done enough.
I would sum up the position by saying that this Budget stands or falls by the rise in the Bank rate. Personally, I believe the Chancellor of the Exchequer has done probably just about enough to make the situation manageable, provided the Bank rate is allowed to fulfil its old functions. I will not argue at great length the value of the Bank rate, for I know hon. Members opposite will not listen, but I would remind hon. Members on this side of the Committee of two points about the Bank rate and about the related increase in investment rates of interest.
First, it is fundamentally wrong that scarce things should be made artificially cheap. That applies to food; it applies to steel; it applies to money. The trouble in the world today is that there is not enough capital, and as long as money is made artificially cheap we inflate the demands on it, and cause many of the troubles from which we have been suffering. It is fundamentally wrong that at a time like this the price of capital, the price of borrowed savings, should be low.
The other reason is of a different kind. Whether we like it or not, the world at large, judging by history, knows that we can kill any inflation if we are prepared to use the Bank rate weapon. It is perfectly true—and there was a very sincere and interesting speech about this from the opposite side of the Committee—that there is a danger in that. It is recognised by all sensible people. But it is no use worrying about what will happen if one dies of thirst if one's immediate trouble is to get over dropsy. So it is of no use for people to worry now about possible heavy unemployment in several years' time, when there will certainly be unemployment this year if we do not solve this inflation problem now. The long and short of the matter is that on a fair assessment of the figures, the Chancellor has, I believe, very skilfully made it possible to use the Bank rate and its associated measures to kill the inflation before it kills us. The thanks of the country are due to him for that.
I would, in the remaining few moments I wish to trouble the Committee, draw the attention of the Committee and of the Chancellor to something I know is well known to him but which cannot be too often borne in mind. The whole of the financial policy of the Socialist Government in the last six years foundered on the mismanagement of a central banking problem. It is an irony that the magnificent efforts of labour and of management in the last few years should have been thrown away. They were magnificent. By and large, and certainly up to a year ago, the responsible trade unionists and responsible wage earners, labour and management, behaved extraordinarily well.
There can be few, I think, if any countries in the world where business was

faced with a Socialist Government which it hated and distrusted that behaved so well in backing up the lawful government as did the people of this country on both sides of industry in the last few years. It is a bad service for anybody to suggest—certainly I have never done so—that either side of industry did not do its best by and large in the last few years. The irony of the matter is that the whole of that effort on both sides of industry has been thrown away as a result of the gross mismanagement of our banking problem, primarily by the worst Chancellor of the Exchequer in history. Hon and right hon. Gentlemen on both sides of the Committee will, of course, at once recognise whom I mean—the right hon. Member for Bishop Auckland (Mr. Dalton).
Sterling balances constitute too big a problem to discuss at this late hour in detail. I hope to have another opportunity to remind the Committee of what has happened. However, the broad situation can be put in a very few words. I have the figures here, but I do not propose to give them now, for the time is too short. Taking the non-dollar and the non-sterling world, we allowed them to run down inflated balances by nearly £300 million by transferring their claims on us to the Commonwealth in return for goods they imported. We were making loans to E.P.U., and so on. We financed them to an enormous extent—by a small export surplus and a huge gold loss of nearly £300 million—more than we could afford.
These claims which were transferred to the Commonwealth were added to their already inflated war-time claims. We used the whole of our export surplus, plus gifts from the Dominions, partly to make real investment in the Commonwealth; but for the rest—about £700 million—it was a flight of capital from this country. The result was we had no claims on the Commonwealth at all, and as we had to have their gold, we bought it by yet further increasing their sterling balances. In effect, we borrowed it "on sight."
What did we do with it? We used the whole of it to keep ourselves going in the United States; in addition nearly £500 million came from our reserves in American aid. We were literally paying the dividends of the Welfare State out of new deposits. It was one gigantic Farrow's Bank. Now the bank is bust. [Laughter.]


This is not a laughing matter. This is the fundamental problem which affects this country.

Mr. Glenvil Hall: We were not laughing at the hon. Gentleman personally but at what he was saying.

Mr. Horobin: I do not know what hon. Gentlemen were laughing at. This seems to me to be an extremely serious matter, and one which has landed this country in its present ghastly state. It is this problem which has caused this huge run on our foreign exchange. My reason for referring to it is not to accuse hon. Members opposite—because they have been proved guilty on the capital charge so often, and they can only be hanged once—but to make a friendly suggestion to the Chancellor, who at least has realised this dreadful problem, and is now asking the country for a final effort, and who has put into operation the banking measures which alone can deal with it.
We do not want once again this great effort in the export trade and in the way of cuts and sacrifices and the new pressure on industry which is being brought about by the Bank rate to be thrown away. I beg of the Chancellor—and I am sure this is much in his mind in the discussions which are going on to prepare the way for convertibility—to use all the skill which he has devoted to this Budget to seeing that his new financial régime does not founder upon the same problem that wrecked the financial administration of right hon. Gentlemen opposite. I am glad to see that my right hon. Friend apparently approves of what I have said. We are looking forward with confidence to his being able to do something about it.
In conclusion, I think that Members on this side of the Committee and people very widely throughout the country will feel that the right hon. Gentleman has in this Budget, faced with an appallingly difficult task—and after all his task is not to defeat the motley collection opposite but to deal realistically with difficult facts—has made a right appreciation, his fundamental strategy has been sound and his tactics skilful. He deserves support and I believe will receive it.

Chairman to report Progress, and ask leave to sit again.—[Mr. Redmayne.]

Committee report Progress; to sit again Tomorrow.

FINANCE [MONEY]

Considered in Committee of the whole House under Standing Order No. 84 (Money Committees) [Queen's Recommendation signified.]

[Colonel Sir CHARLES MACANDREW in the Chair]

Resolved,
That it is expedient to authorise—

(a) the issue out of the Consolidated Fund of the sum of five hundred and seventy-five million pounds for the permanent annual charge for the National Debt for the current financial year, instead of the sum of three hundred and fifty-five million pounds; and
(b) the payment out of moneys provided by Parliament of any expenses of the Commissioners of Customs and Excise in paying for samples taken in connection with purchase tax.—[Mr. R. A. Butler.]

Resolution to be reported Tomorrow.

ESTIMATES

Mr. George Ward discharged from the Select Committee and Mr. Donner added.—[Mr. Redmayne.]

HIRE-PURCHASE AND CREDIT SALES

10.2 p.m.

Mr. Eric Fletcher: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Hire-Purchase and Credit Sale Agreements (Control) Order, 1952 (S.I., 1952, No. 121), dated 28th January, 1952, a copy of which was laid before this House on 29th January, be annulled.
It will probably be for the convenience of the House if we also discuss the next Motion:
That an humble Address be presented to Her Majesty, praying that the Hire-Purchase and Credit Sale Agreements (Maximum Prices and Charges) (Amendment No. 2) Order, 1952 (S.I., 1952, No. 122), dated 28th January, 1952, a copy of which was laid before this House on 29th January, be annulled.
The two Motions deal with substantially the same subject-matter. Both Orders to which we invite the House to object were made by the President of the Board of Trade in order to place limitations upon the freedom of the community to enter into hire-purchase agreements. When the Chancellor of the Exchequer made his statement on the financial and economic situation on 29th January, he spoke of the necessity for introducing regulations to lighten the domestic load on the engineering industry by restricting the supply of metal goods bought for personal use.
These Orders were laid before Parliament that day and came into operation on 1st February. I am not sure whether the House, still less the public, are sufficiently familiar yet with their effect or their very serious infringement upon the hitherto very wide freedom of the community to enter into hire-purchase agreements.
Our criticism of the Orders is directed not against the necessity for placing some restrictions upon the use of consumer goods but against the method by which that principle is carried out. The burden of our criticism is that this is a vicious piece of class legislation and that it is unnecessary and unfair discrimination against the poorer sections of the community, which is paralleled by other measures that the Government have introduced since then.
What would be the effect of these Orders if they were to remain unchallenged and not annulled? I should like to draw the attention of the House to the very wide range of articles included in the Schedule. This is not an Order which deals merely with television sets, radio-gramophones and matters of that kind. This is an Order which deals with a very large variety of household goods in daily use in practically every household in the country. For example, it deals with dish washers, drying cabinets, ironing machines and irons, wringers and mangles, floor polishers, vacuum cleaners, water softeners and so forth, apart from all kinds of office furniture, bicycles, tricycles and practically every kind of mechanically-propelled vehicle.
The House will be aware that for many years past the community has been in the habit of acquiring articles of this kind under the hire-purchase system. That has proved to be the only method by which not only the poorer sections of the community, but a very large number of people can, on the one hand, set up in business when it is a case of buying office furniture; I am referring to the needs of the small traders. On the other hand, it is the long recognised method by which a newly-married couple desirous of setting up a home can acquire the essentials of a household.
For a long time people have had the advantage of buying these household goods on very generous hire-purchase terms. The object of this Order is seriously to curtail those terms. What the Order does is to make it illegal as from 1st February for anybody to acquire any of these articles under a hire-purchase agreement unless the hire-purchase agreement conforms to the provisions of the Schedule.
The relevant provisions of the Schedule are, first, that in any hire-purchase agreement entered into after 1st February there shall be paid a minimum percentage in cash of 33⅓ per cent. of the purchase price. That, of course, is far higher than was the standard normally required to be paid by the purchaser under a hire-purchase agreement. Second, the Schedule requires that the period over which the hire-purchase instalments may be spread shall be limited to a period of eighteen months, and in one category of cases to 12 months. Those periods are


very much shorter than has been normally the recognised period over which the payments are spread.
There are other serious objections to these Orders to which some of my hon. Friends, who will speak, will draw attention, and to only one of which I would refer, which I am sure would appeal to the Parliamentary Secretary to the Board of Trade. I am talking about the glaring ambiguities in the Order. The hon. Gentleman is a master of precision in the use of the English language, and I was very sorry to see, therefore, that an Order, emanating from his Department of all Departments, contained language of such appalling obscurity and such dreadful ambiguity that he, of all persons, had to go as a penitent in a white sheet before the Statutory Instruments Committee and apologise for the ambiguity of the language, undertaking to introduce an amending Order, which, we hope, will do something to remove the ambiguities.
I will refer to one of them. It seems impossible, reading this Order, to know in which category an ordinary motorcycle falls. Is it in the category governed by 33⅓ per cent. for 18 months or in the category governed by a minimum payment of 25 per cent. for a period of 12 months? The motorcycle is not specifically referred to but there is one group of articles called "mechanically propelled vehicles" and another category, "bicycles and tricycles whether or not mechanically propelled." Practically everybody who buys a motorcycle does so on the hire-purchase system, and many firms specialising in that trade want to know in which of the categories a motorcycle falls. This is even more true of motorcycles and sidecars.
It is an affront to produce an Order containing such ambiguity. The burden of my complaint is not merely technical but it goes to the root of the policy which has led the Government to introduce this Statutory Instrument. We are not unmindful of the realities of the financial and economic crisis, and we are not unprepared to support all necessary measures that Her Majesty's Government may introduce to deal with it, but we object most vehemently to the misuse of the national emergency for the purpose of introducing measures of this kind,

which are vicious examples of class legislation.
This Order limits the amount of goods which can be obtained, and discriminates against those who have not the means to obtain ready cash. It discriminates against the poorer sections, who are just as entitled to have these articles as anybody else. It is unnecessary to introduce these measures against one class of the community under the alleged necessity of dealing with an economic crisis. For those, and other reasons which my hon. Friends will substantiate, I hope that the House will support the Motion and annul this Statutory Instrument.

10.15 p.m.

Mr. Desmond Donnelly: I beg to second the Motion.
I want to say how much I agree with my hon. Friend the Member for Islington, East (Mr. E. Fletcher) about the measure of class warfare contained in this Order. We think that if measures are necessary to restrict the expenditure of the country in order to deal with the crisis with which we are faced, this is not the right method. Indeed, it is a moot point whether the crisis is really as bad as some hon. Members opposite make out. Sometimes I wonder whether it is not, to some extent, a figment of their imagination in order to impose burdens on the working classes of this country. Even if such burdens are necessary, we think they should be shared by all sections of the community and not by one section, which means that people with money in their pockets are able to get away with it.
I want to refer to one or two aspects of the class segregation which this Order imposes. First, let me say a word or two about the transport vehicles referred to in Order 121. The Government are always talking about the need for greater production. The Chancellor of the Exchequer underlined this in his Budget speech two days ago and right hon. Gentlemen on the Treasury Bench are always saying it.
One of the most important aspects of efficient production in this country is how to get workers to and from their work. If we ask men and women to work late shifts when public transport is unavailable, it is necessary to provide means by which they can get to and from their homes readily. I do not know how the


Parliamentary Secretary to the Board of Trade can come to this House and justify this kind of Government Order which restricts the sale of bicycles to those people who can put down a certain deposit and who can make payments within a certain period of time. I put it to the hon. and learned Gentleman that there is no valid reason for including bicycles in this Order.
Why should bicycles be included? If the hon. Gentleman says that this Order deals only with luxuries, let me put it to him that if he knew how the working classes of this country lived, he would realise the importance of bicycles. But then hon. Gentlemen on the Treasury Bench have not the vaguest idea of that, or anything else, relating to the livelihood of the working classes of this country.
Let me say a word or two more about transport to and from work. I realise that hon. Gentlemen opposite, who travel in their Rolls Royces, do not always appreciate this, however difficult they may find it without their Ministerial cars these days. However, I would urge them to consider this matter, because it may well be that if their sacrifices are the same as the rest of the nation, they may be needing bicycles or motor bicycles if they really mean business.
Motorcycles are important as far as the rural areas are concerned, and particularly in a constituency such as mine, where we have a big ordnance depot. It it of necessity remote, public transport across country is uneconomic and the motorcycle is one of the main means by which workers get to and from the ordnance depot. They are engaged on vital work for the nation, and yet the President of the Board of Trade has laid an Order which will make it extremely difficult for them to get new motorcycles in the future.
As my hon. Friend has said, motorcycles are under an ambiguous classification in this Order. Nobody is sure whether they are classified as motorcars or pedal cycles. I submit to the Parliamentary Secretary that he might devote some of his knowledge of the English language to this subject to clear up this matter.
I had a question on the Order Paper some time ago asking his right hon. Friend in which category motorcycles

came, and whether they could not be classified as motorcars instead of pedal cycles because it extended the period of payments and made it easier to purchase them, if they had to come under this Order at all. One of my hon. Friends asked a Question about this today, and the President of the Board of Trade said he was still considering this matter. He has been considering it for a long time. I hope we are to have an answer tonight and that the answer will be, not that motorcycles are included in the same way as motorcars, but that they will be exempted from the Order altogether.
It is a fantastic situation, even if they are included in the Order, that there should be this ambiguity. I agree entirely with my hon. Friend the Member for Islington, East, that it is ironic that the hon. and learned Gentleman who is the Parliamentary Secretary should be the person having to defend this misuse of the English language.
I have often wondered how the President of the Board of Trade ever became the President, how the Parliamentary Secretary ever went to his Department, or how any of his colleagues on the Government Front Bench ever became the Government. After reading the Order, I am even more staggered as to how they ever became occupants of the Treasury Bench. In fact, they are like flies in amber. One wonders how ever they got there. I have a shrewd suspicion that we may find them not occupying the Treasury Bench—

Sir William Darling: On a point of order. Is there anything about flies in amber in the Order which is now before the House?

Mr. Speaker: I have not got the relevance of the reference yet, but I have no doubt that the hon. Member will approach the Order in due course.

Mr. Donnelly: Certainly, Mr. Speaker. I apologise if my concern about the occupants of the Treasury Bench has been slightly weighing with me.
Another aspect of the Order is that motor coaches are included as vehicles for which 33⅓ per cent. must be paid down and the rest paid in 18 months. I do not know whether the Parliamentary Secretary is aware that many motor coaches are normally paid for on hire-


purchase terms over a very extended period. Very often it is the custom of hire-purchase companies to vary the rates of payment according to the fluctuations of seasonal takings in the tourist trade. The Order will create very real hardship for people seeking to replenish their motor coach fleets.
Doubtless the Parliamentary Secretary will appeal to the country very shortly to try to increase its tourist trade. How on earth does he expect the tourist trade to be increased if the motor coach fleets are to be perpetually kept down, without any hope of replenishment, and with his Department creating hardships of every kind in respect of the re-equipment of the tourist industry? This is just another example of the way in which the Order legislates against those who seek to build up their capital and favours those who already have the cash in the bank or in their pockets.
I do not know whether the Parliamentary Secretary knows that many taxis are bought on terms extending over ten years. The Order will prevent taxis being paid for on any terms which extend over more than 18 months. Taxi drivers already have received one serious blow this week from the Chancellor of the Exchequer. Unless the Order is rescinded tonight, they will receive another serious blow.
My hon. Friend the Member for Islington, East, talked about the need for office equipment being bought under hire-purchase schemes. I will not go into all that, but I say that every one of these discriminations under the Order goes to show that the Government are favouring the "haves" against those who have not, and against those who are seeking to become "haves."
During the last Election, among the many other poses in which they appeared before the electorate, hon. and right hon. Gentlemen on the Treasury Bench posed as the friends of the small man. The Order makes it perfectly clear that they are not in the least interested in the small man. All they are interested in is helping the big man, the man with the cash. If ever there was an example of the Treasury Bench appearing before the nation as the representatives of the capitalists, this Order is it.
Let me come to another argument which has been used in connection with the Order. In announcing it in the discussions in the House on. I think, 29th January, the Chancellor of the Exchequer said that the Order was necessary because the nation needed the restriction on capital expenditure and because hire-purchase was a means of living beyond our income. If this really is a valid argument, why on earth are the Government going ahead with a major scheme of hire-purchase?
I see present the Parliamentary Secretary to the Ministry of Housing and Local Government, who often preens himself about the need to build private homes and create a property-owning democracy. If we need to restrict credit, why on earth are the Government trying to further a major part of hire-purchase in the work of the building societies? It is nonsense if, on the one hand, the Government are saying we want less hire-purchase while, on the other hand, they are urging local authorities to issue more private building licences, nearly all of which will be used by people borrowing from building societies.

Sir W. Darling: Would the hon. Member make clear the difference between capital goods such as houses and consumer goods such as radio sets? Is there any difference in his mind?

Mr. Donnelly: The hon. Member has had a very long experience of the Labour movement and he should know that there is little difference in the capital expenditure on what are now necessities and which go into homes of working class people: refrigerators, lawn mowers, and motorcycles.

Sir W. Darling: I am afraid I have not made myself clear. Does the hon. Member, with his long knowledge of the Labour movement, distinguish between capital goods such as houses and consumer goods such as ice cream makers?

Mr. Donnelly: I am sure the hon. Member will agree that wringers and all these household necessities are just as much a single purchase in one lifetime as a house. I do not suppose the hon. Member would buy several refrigerators. I cannot see why, if we are to restrict one kind of hire-purchase, we should go on


encouraging another kind. If the former kind of borrower is living beyond one's income so is the other.
The argument used by the Chancellor of the Exchequer in advocating this kind of restriction is that he also complains that hire-purchase is a means of living beyond one's income. I have a copy of the journal of the Hire Purchase Trade Association. I hasten to say that I am not speaking on behalf of the Hire Purchase Trade Association. I would hesitate to do that, especially when I discover from their notepaper that the hon. Member for the Cities of London and Westminster (Sir H. Webbe) is one of their vice-presidents. I should be speaking with very great diffidence on their behalf when I find they have such an august representative in this House.
I see from their journal, too, that the hon. Member for St. Marylebone (Sir W. Wakefield) was the guest of honour at their last annual dinner. So I should not like to say that I was speaking on behalf of the Association when there are two such distinguished representatives. I am sorry that neither of them appear to be here, but if they come in I hope they may be fortunate enough to catch your eye, Sir, and that, should my hon. Friend and I consider the reply of the Parliamentary Secretary to be unsatisfactory, they will join us in the Lobby in a Division.
Coming back to the argument of the Chancellor that hire-purchase is a means of living beyond one's income, I notice that the Association's journal for autumn, 1951, says:
When everyone is prosperous and drawing large real wages they go out and buy those capital goods which they need and for which, owing to their feeling of prosperity, they are confident that they can pay. In such times, capital may be short for the average man, but his confidence is high and he knows he has the necessary margin and the continuing prospects to justify his seeking credit.
Hon. Members do not know what that means. They have confidence to justify seeking credit.
Now since most people are honest (and there would be no credit at all if most people were not), when the cost of living cuts the value of real wages and so reduces or eliminates what might be termed the H.P. margin in the wage packet, then H.P. sales slump.
That is the hire-purchase trade's view on the question of living beyond one's

means. When there is a trade boom hire-purchase booms, but, when there is a trade recession hire-purchase declines as well, because the margin in people's wage packets for hire-purchase disappears. I see that the Parliamentary Secretary takes my point. Will he explain, then, when he comes to reply to the debate later tonight, how the Chancellor of the Exchequer justifies his argument about hire-purchase being a means of living beyond one's income.
There is a third point which I should like to put, and that is that hire-purchase in itself is a desirable piece of machinery in a modern society. In my view, it helps savings, it gives working people, when they get their weekly wage packets, certain proportions of which are definitely allocated to some tangible thing which they can see for themselves, an encouragement towards thrift, in saving something that might otherwise go towards some lighter pleasures or be spent in the public house. I am sure that my hon. Friend the Member for Ealing (Mr. J. Hudson) would support me in the view that this kind of thrift is something which is more desirable than spending money on amusements, entertainments or on buying beer in a public house.
I hope the Parliamentary Secretary, in his reply, will be able to justify this Order on the grounds that it is in the national interests. I doubt it. I urge my hon. Friends to join with us in criticising the Govermnent's action, of which we have given some examples, as showing the way in which, after coming into office, they have betrayed the interests of the working classes, safeguarded the interests of one section of the community and played ducks and drakes with the promises which they made at the Election, when they claimed to be standing on the side of the small man, as against the representatives of vested interests.

10.33 p.m.

Mr. A. Blenkinsop: I wish to deal with one aspect of the matter which has been raised by my hon. Friends which considerably affects the workers of my constituency, namely, that dealing with the hire-purchase of motorcycles, and the use which workers in all parts of the country, in my constituency amongst others, make of motorcycles bought by hire-purchase in


getting to their work when it is some distance from their homes.
I support all that has been said by my two hon. Friends. In this particular question, it seems to me that, if motorcycles are intended to fall into that category which includes bicycles and tricycles, whether or not mechanically propelled, there is unfair discrimination against motorcycles as against motorcars, and there seems to be no reason at all why that discrimination should exist.
There are many people in my constituency who live in Newcastle and who work in the mines, shipyards and engineering factories all over Tyneside. Very many of them purchase motorcycles in order to get to their work in good time, and also, in view of late shifts being worked, to return in reasonable time to their own homes. Under the arrangements provided for in this Order, if one of my constituents wished to buy a motorcycle costing £150 or £200, which I believe is quite common, he would have to make a £50 cash payment, and then make payments of £13 11s. 3d. per month for 12 months.
It may be that in the minds of hon. Members opposite it is possible for workers in the North-East to make payments of that sort from their income. It may seem to them, and perhaps may have seemed to the Chancellor when he prepared his Budget, to be possible for a worker in my constituency to find a large sum of money; but certainly it is true that, so far as the workers of the North-East are concerned—and, I imagine, other parts of the country—none, or hardly any, can possibly manage to make payments at this rate.
We suggest that if motorcycles are to be retained in the provisions of this Order at all—and I would suggest that they should, with cycles, be excluded—then a period of repayment over 18 months or longer should be allowed; so that those with comparatively limited means might purchase motorcycles for vital needs. Surely it is absurd that anybody who can afford to buy a motorcar should be enabled to make his repayments over 18 months, while those with much more limited means—and who cannot, therefore, consider the purchase of a car—should be restricted in this way; and should, in fact, be completely prevented

from buying a motorcycle, which they can afford.
In my own area, and doubtlessly elsewhere, I know of cases where, because of inability to buy under these terms, men will not be able to take employment at important factories outside Newcastle which otherwise they could. What is the result? They may well drift into general unemployment, or take employment at much less important work; and on those vital grounds alone it is important that the Parliamentary Secretary should be able to announce that the Order will be withdrawn and that a new Order will be made, excluding at least tricycles and bicycles, whether or not mechanically propelled, so that workers in my constituency and elsewhere can carry on the work which they should undertake.

10.38 p.m.

Mr. Ronald Bell: The hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) differs from his hon. Friends the Members for Islington, East (Mr. E. Fletcher) and Pembroke (Mr. Donnelly) in that he is apparently under a genuine apprehension that he is on a good point. His whole speech seemed to me to be directed to a complaint that those wishing to buy a motorcycle would have a shorter period in which to pay the instalments than those buying a motorcar; but that is not the case. Under this Order, a person buying a motorcycle has 18 months in which to effect the repayments.

Mr. Blenkinsop: That is a question to be cleared up, but as we largely understood it, and as traders in my constituency understand it, the period is 12 months, and not 18.

Mr. Bell: I still give the hon. Member credit for believing he is on a good point, but I do not know how he arrives at this misapprehension. We all know that the Parliamentary Secretary to the Board of Trade would never be guilty of any ambiguity, and it is perfectly clear that motorcycles come under "mechanically propelled road vehicles."

Mr. Blenkinsop: rose—

Mr. Bell: I do ask the hon. Gentleman to contain himself for a moment, or I shall think that he is trying to get up to ride a motorcycle. He keeps jumping about.

The Parliamentary Secretary to the Board of Trade (Mr. Henry Strauss): If I might intervene for a moment—I do so only for the convenience of the House—I think that on a point of construction the hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) is quite correct. I will point out the reasons in a moment, but the hon. Gentleman opposite is right in thinking that motorcycles are under the Order classed with other bicycles.

Hon. Members: Withdraw.

Mr. Bell: I shall await the explanation which my hon. and learned Friend may give, but as at present advised I do not withdraw from the position I was explaining just now, because it appears to me that the last category
bicycles, tricycles, whether or not mechanically propelled,
is governed by the words
and auxiliary engines therefor…
It is the kind of bicycle with an engine attached that is struck at in the last paragraph of this Order. If my hon. and learned Friend takes a different view I will concede to the hon. Gentleman the Member for Newcastle, East, that there must be some ambiguity in the language, and I say that without any prejudice to the contention I have just put forward.
I now come to the undoubtedly surer ground of the hon. Member for Islington, East, and hon. Member for Pembroke, who tried to whip up a great dust of partisanship and class warfare about the comparatively factual provisions of this Order. I cannot ever remember listening to a more exaggerated and prolonged argument on so narrow a foundation. Their suggestion was that this was class discrimination, attacking only the poorer people. But so far as bicycles are concerned, my hon. Friend the Parliamentary Secretary to the Ministry of Housing and Local Government—who was here a moment ago—is one who travels to and from work on a bicycle.

Mr. Norman Dodds: Will the hon. Member ask his hon. Friend to join the Pedal Club? They want Members of Parliament to join the club.

Mr. Bell: No doubt my hon. Friend will deal with that if he is asked, but I will soft-pedal it. I do not know whether he put down 25 per cent. or how many instalments he has to pay, but I am sure he would not feel that this was an example of class discrimination. That is equally true of the other items included in this Order.
I ask hon. Gentlemen opposite, in so far as they may feel there is some point in the argument they are putting forward, to remember that this is one of at least three provisions which the Government are presenting in pursuance of their policy of restricting credit. I think we are all agreed that some kind of restriction of credit must take place now. We all realise there has been too much money chasing too few goods. [HON. MEMBERS: "Nonsense."] I am glad to hear hon. Gentlemen opposite deserting their right hon. Friend the Member for Bishop Auckland (Mr. Dalton)—whom I was quoting when I used that phrase. [HON. MEMBERS: "When did he say it?"] He said that, I think, a couple of years ago, and it is true now.
It will be remembered that, first of all, we have had an increase in the Bank rate. Secondly, there has been a great stiffening of the conditions under which bank credit is granted. There has been a very strong request to the banks not to allow overdrafts except in cases where a productive enterprise is stimulated. There has been a very strong directive to the banks. Thirdly, we have this measure against hire-purchase.
It is obvious that the increase in the Bank rate and the restrictions on bank overdrafts primarily affect the better-off people. I do not say that they affect them exclusively, for the increase in the Bank rate to some extent affects all classes of the community, but it affects the wealthier classes most, and the restrictions on overdrafts certainly affects the better-off people almost exclusively.

Mr. A. C. Manuel: On a point of order. Is there anything about the Bank rate in this Order?

Mr. Speaker: No, I do not think there is. I think the hon. Member's argument is a little circuitous, but I could see some relevance in it.

Mr. Bell: My argument was that the criticism against this Order—that it is class discrimination, which is the sole argument advanced by the mover and seconder of the Motion—is misconceived, because the Order is the third of three measures which together make up a coherent policy. The drawing on credit by all parts of the nation has been affected by the Government in recent months to an equal extent.
When we see this Order against that background, it becomes clear that the criticisms offered by the hon. Member for Pembroke and the hon. Member for Islington, East, are misconceived and misdirected. They would not be fair even if this Order stood in isolation, because the articles in it cover a wide range and affect all kinds of people. But when it is seen against the background of the other actions in relation to credit which the Government have taken, the case put forward falls completely to the ground and appears for what it is—merely an attempt to stir up class prejudice and hostility against this Government and this Budget. That creates an atmosphere which, I would remind hon. Members opposite, will be damaging to tfie national interest and, in consequence, as much contrary to their advantage and to the advantage of the country as it is contrary to the advantage of the party which they are attacking.

10.48 p.m.

Sir William Darling: I hasten to join my hon. Friend the Member for Henley (Mr. Hay) in supporting the Government—

Mr. Manuel: The first mistake! He is not here.

Sir W. Darling: I apologise to my hon. Friend the Member for Buckinghamshire, South (Mr. R. Bell). I think my hon. Friend is right in saying that this Order is part of the general policy of the Government. They have restricted overdrafts and bank lending, very properly, and it would be class legislation indeed if they dealt with only those classes. They have restricted the capital investment programme, and this Order completes the circle of restrictions.
A member of the late Government the right hon. Member for Blyth (Mr. Robens), said last week that we should shortly have one million unemployed.

Who am I to despise such a high authority? If that is right, are not the Government right in preventing foolish people, less well-informed than the right hon. Member for Blyth, from embarking upon the purchase of radio sets and television sets?

Mr. Donnelly: How on earth does the hon. Member think that a million unemployed could buy goods on hire-purchase?

Sir W. Darling: I thank the hon. Member, who was so courteous to me, for helping me in my argument. If, as is believed by some right hon. Gentlemen opposite, we are to have national calamity and unemployment, would the Government be right in not protecting simple, innocent people, not so well-informed as the hon. Member for Pembroke (Mr. Donnelly) or even the right hon. Member for Blyth, from purchasing some of these things?
If they do not know of this situation they may be tempted—and I am glad to think hon. and right hon. Gentlemen opposite are with me in this matter—they may be tempted, if they do not know these deep economic facts, to buy drying cabinets, dish washers, wringers and mangles or water softeners. They may now know we are facing an economic blizzard and it is the duty of the Government to warn them of that contingency. This is really a piece of guidance that, I think, will serve a very useful purpose.
The hon. Member for Islington, East (Mr. E. Fletcher) warned the House that this Order would seriously hinder the development of small businesses—a cause, I know, he carries not only in his hand but in his heart. But, really, does he, with his considerable business experience, seriously believe that a man cannot set up a small business in these difficult days without buying on the instalment system a cheque-writing machine? Does he seriously believe that a man cannot conduct his new small business successfully without buying on the instalment system a cash register and the parts thereof? Believe me, successful businesses have been started with less apparatus than that indicated in this Order.
Does the hon. Gentleman really suggest that he would advise a client of his who is short of capital, when we are


approaching a crisis, in which we are to be faced with a million unemployed, and great restrictions of raw material and capital investment—would he advise his client, setting up a new business in these circumstances—to buy on the instalment system a coin sorting, counting and wrapping machine? Or would he say to his client, "You can dispense with a coin sorting, counting and wrapping machine, for others have done so successfully, though regretfully, but you ought not to dispense with an addressing, stamp affixing, postage franking, letter opening and letter sealing machine."
Suckers and fools are born every day and the purpose of this Order is to protect such persons in these difficult times, when considerable restrictions of capital investment are imposed, from being foolish. The Socialist Party should be the last to complain. They have been engaged in binding enterprise and enterprising people—and with good intentions, doubtless, have intervened in my life—and they must not blame me if I think it not undesirable that some should be protected from their own folly. This Order is simply intended for that purpose.
In ordinary times I should find myself opposing this Order. In ordinary times I believe in setting the people free. But in the last six years the people of this country have been in some ways enslaved, and face now a crisis from which the late Government ran away. That is the position with which we are faced, and in these circumstances I see no harm in deterring people for a while from buying on the instalment plan a number of commercial and domestic advantages. I find myself in this position regretfully, but it has been brought about by the incompetence, the simplicity and the ignorance of the former Government.
I hope that at no distant date I shall again be able to join with hon. and right hon. Gentlemen opposite in seeking to allow the people full recourse to that system of purchase which in the old days the Socialist Party used to call the "Never-never system." I have heard many and many a time Socialists complain that men's wages packets contained not enough to enable them to buy, for cash, new clothes, so that they were forced to buy on the "Never-never system." That was what the high-purchase system used to be called. Many of us in the

hire-purchase system will be pleased at the advocates of it which we have found tonight amongst the party opposite.
Really, they have nothing to complain of, and I suspect that the hon. Gentleman the Member for Pembroke and the hon. Gentleman the Member for Islington, East, are only thinking that here they have in this Order something with which they can attack the Government, something on which they may hang their individual theories about class war. They will be mistaken in that. This is a prudent Order. It is in accordance with the Government's policy of restraining capital investment and it is guiding persons who might be misguided by not very reliable advisers like the hon. Member for Pembroke. It tells them to keep their money in their purses and not to buy wringers, dictating machines and motorcycles.

10.56 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. Henry Strauss): I shall try to deal with the various points raised by hon. Members who are praying against these Orders. I think the hon. Member for Islington, East (Mr. E. Fletcher) was right in saying that they should be taken together. The second Order is purely consequential. I shall devote my speech, as he and other hon. Members did, to the general subject. It may be useful, having regard to the exaggerated things which have been said, to remind the House of the object of these Orders. It is to check demands upon the productive capacity required for defence and for export. I should have thought that that was a policy with which, with few exceptions, the whole House would have been in sympathy.
It is true that no one is hit by this Order unless he wishes to enter into a hire-purchase or credit sale agreement, to the extent, of course, that the particular category of goods falls within the terms of the Order. Obviously, if a man can pay cash, he is not affected by an Order limiting hire-purchase. If it is desirable to carry out the purpose which I described at the beginning of my speech, it may be necessary, as part of the general scheme, to deal with hire-purchase agreements and credit sale agreements—

Mr. Hector Hughes: Before the hon. and learned Gentleman leaves that point—

Mr. Strauss: I think that perhaps, I had better develop my speech—[Interruption.]

Mr. Speaker: It is out of order for the hon. and learned Gentleman to remain on his feet unless the Parliamentary Secretary gives way.

Mr. Strauss: The hon. and learned Member for Aberdeen, North (Mr. Hector Hughes) says, "Before the hon. and learned Gentleman leaves that point," but I have not the slightest intention of leaving it. I merely want to develop my argument, if that is agreeable to the House as a whole, and even to hon. Members opposite. Several hon. Members have made speeches to which they wish me to reply. The hon. and learned Member can make a speech later if he wishes, but I beg him to allow me to develop my argument.
I say, first of all, that these Orders have a perfectly good and legitimate object, which is to check demand on the productive capacity required for defence and export. If hon. Members will look at the goods to which the Orders apply they will find they are of direct interest generally to the metal using and engineering industries. These are precisely the industries on which we wish that demands for civilian purposes should be no greater than they need be, in the interests of defence and export.
The next thing of which I would remind hon. Members is that hire-purchase and credit sale agreements are not made illegal. They are not stopped. One would think, from many of the speeches which have been made, that the whole institution of hire-purchase had been abolished. Not at all. There are a great many articles which do not fall within the terms of these Orders. In the case of those which do, they certainly tighten the terms of the agreements, which at present is extremely important, but they do not alter hire-purchase as radically as one would think after listening to some of the speeches that have been made.
I should like to come at once to a charge which appeared in many of the speeches, and was first made by the hon. Member for Islington, East, in regard to motorcycles. Let me deal separately with two points. First, there is the charge of ambiguity in the provisions relating to motorcycles; and, secondly,

when I have stated what is the accurate interpretation of this Order, it can be decided whether the category is rightly chosen or whether, in the opinion of this House, the Order ought to be amended.
Let me deal first with this charge of ambiguity, which I should have thought was unarguable were it not for the intervention of my hon. Friend the Member for Buckingham, South (Mr. R. Bell). Let me explain why I cannot think it is ambiguous. The first category is set out on page 3:
Mechanically propelled road vehicles and chassis (excluding ambulances, invalid carriages, bicycles, tricycles,…)
Nothing comes in that at all which is not a mechanically propelled vehicle, and if it excludes bicycles it must mean mechanically propelled bicycles. [HON. MEMBERS: "Why?"] Hon. Members must realise that if "mechanically propelled vehicles" is the description, then if bicycles are excluded it must mean mechanically propelled ones, otherwise there is no point in the exclusion.
If hon. Members will look at the next page they will see the last category:
Bicycles and tricycles, whether or not mechanically propelled.…
There is no doubt in our view that a motorcycle comes into the latter category and cannot come into the former. So much for the charge of ambiguity.
Let me turn now to the other charge which many hon. Members have made. Would it not be fairer, they ask, instead of grouping motorcycles with other cycles to group them with other mechanically propelled vehicles? There is a very arguable case for that, and, as my right hon. Friend has said in answer to questions, he is considering an amendment of the Order which would achieve that change, a very early announcement will be made on that subject. There is no ambiguity but I think there is an arguable case here. Hon. Members should not exaggerate the effect of the change. What they are asking for is that there should be a longer period for paying off the balance. But that would also mean, of course, a higher initial deposit, if motorcycles are to be grouped with motor vehicles, which is one of the changes for which hon. Members opposite are pleading.
So much has been said of hardship that I should like to give an example of what


the Order means in figures. If the present cost of a pedal cycle varies from £16 to £20, the deposit of 25 per cent. would be £4 to £5 and the balance of £12 to £15 would have to be paid over a period of 12 months. It would mean payments of about 4s. 6d. to 6s. a week. Now the normal practice would be to require a deposit of £2 10s. and the remainder of the payment over 12 months. The additional burden, putting it at its highest, is, therefore, the addition on the initial deposit of say 30s. to 50s.
I am not, in any part of my speech, going to say that no hardship at all is caused by this Order. What I am going to say is that I hope no unnecessary hardship is caused by it. Many of the steps that Her Majesty's Government have to take in the present emergency are not pleasant. The question is whether they are right and necessary steps.
The hon. Member for Pembroke (Mr. Donnelly) who, for some reason which escapes me for the moment, posed as a member of the working class, challenged me to say that this Order applies only to luxuries. I shall say nothing of the sort. Of course it does not.
I have given the object of the Order but I should like to call attention to another matter, that is the contribution that some of these industries are making to our export trade. Take pedal cycles, about which a good deal has been said. Exports of pedal cycles amounted in 1951 to £21 million, which is not a negligible contribution by one industry to our balance of payments. The case for this Order is that it makes a definite contribution to a most urgent national need.
The hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) asked, among other things, for the exclusion altogether of pedal cycles and motorcycles from the Order. I cannot hold out hope of their exclusion, but I can hold out some hope, for the reasons I have stated, of the alteration of the classification of motorcycles. I agree cordially with the words of common sense which came, as they so often do, from my hon. Friend the Member for Edinburgh, South (Sir W. Darling). [An HON. MEMBER: "He has gone."] He made a useful contribution before he went.
I do not know that there was any other point raised. I think the hon. Member

for Islington, East started his speech by saying he did not question the necessity for some such Order, but he complained of its ambiguity and alteration of terms which it imposed. The terms which this Order makes compulsory in the cases to which it applies are not a very great modification of the best practice in the past of the companies who do this class of trade, but only a modification to the extent which, in the view of the Government, is rendered necessary by the emergency in which we find ourselves.
It is perfectly true that there has not been an Order of this kind for some time. It would not be at all astonishing if in the working of this Order certain defects were found. I know from my correspondence with hon. Members in all quarters of the House that there are one or two points of difficulty—the motorcycle is one. There is another—I do not know whether it has been mentioned—and that is the case of taxis, which does deserve careful consideration to see if there might be some way of meeting certain exceptional difficulties without endangering any essential purposes of this Order. That is now under consideration.
I say that this Order is a reasonable Order, with which the vast majority of hon. Members on both sides sympathise. There is no sign of its being a "class" Order because it only hits those who wish to enter into credit sale or hire-purchase agreements. Of course it does, just as other steps that the Government are taking with a similar object—and into which it would not be in order for me to enter now—hit chiefly another class.
But those who are hit by this Order are not hit in some way that dramatically affects them in the supply of necessities. To hear some of the speeches one would think that ordinary furniture was subject to this Order: of course it is not. It has been carefully omitted. Cookers, perambulators and many other articles which are ordinarily supplied under hire-purchase agreements have been deliberately excluded from this Order in order that it shall not have the effect of injuring people setting up homes and so on, as hon. Members fear.
But for the purpose of reducing the strain on our engineering and metal using industries there is an unanswerable case


for tackling this problem. I suggest to the House seriously that these Orders tackle this problem in a reasonable way and that they are carefully calculated and designed not to cause any unnecessary suffering. I have mentioned the points on which amendment is being considered, and with that explanation I hope that hon. Members will agree that these Orders are proper Orders and should be sustained.

11.14 p.m.

Mr. E. Fletcher: I regret that I cannot regard the Minister's reply as satisfactory. In these circumstances I think the most convenient course for me is to invite my hon. Friends to test the opinion of the House and have a Division.

Sir Herbert Williams: Before we have a Division, I should like to say that I think these Orders are

stupid. The only thing I ever bought on hire-purchase was a refrigerator with a storing capacity not exceeding 12 cu. ft. I bought it on hire-purchase from Worthing Corporation because I knew they would look after it. That was the only reason.

I think both these Orders are quite silly. We have inherited a lot of nonsense from the other side of the House, and I do not think the Government which I support are as yet quite aware of all the nonsense of hon. Gentlemen opposite, who instructed the civil servants unwisely. 'I do not think it matters one way or another what happens to these Orders, and I see no reason for getting excited over them.

Question put,

The House divided: Ayes, 87 Noes, 116.

Division No. 38.]
AYES
11 18 p m


Albu, A. H.
Hale, Leslie (Oldham, W.)
Parker, J.


Bence, C. R.
Hargreaves, A.
Peart, T. F.


Benson, G.
Herbison, Miss M.
Price, Joseph T. (Westhoughton)


Beswick, F.
Hobson, C. R.
Robens, Rt. Hon. A.


Bing, G. H. C.
Holman, P.
Robinson, Kenneth (St. Pancras, N.)


Blackburn, F.
Houghton, Douglas
Rogers, George (Kensington, N.)


Boardman, H.
Hubbard, T. F.
Ross, William


Bottomley, Rt. Hon. A. G.
Hudson, James (Ealing, N.)
Royle, C.


Bowden, H. W.
Hughes, Hector (Aberdeen, N.)
Silverman, Julius (Erdington)


Bowles, F. G.
Hynd, J. B. (Attercliffe)
Simmons, C. J. (Brierley Hill)


Brown, Rt. Hon. George (Belper)
Jeger, George (Goole)
Snow, J. W.


Burton, Miss F. E.
Jenkins, R. H. (Stechford)
Sorensen, R. W.


Callaghan, L. J.
Jones, David (Hartlepool)
Soskice, Rt. Hon. Sir Frank


Castle, Mrs. B. A.
King, Dr. H. M.
Stewart, Michael (Fulham, E.)


Champion, A. J.
Lee, Frederick (Newton)
Thomas, David (Aberdare)


Davies, A. Edward (Stoke, N.)
Lee, Miss Jennie (Cannock)
Ungoed-Thomas, Sir Lynn


Davies, Ernest (Enfield, E.)
Lewis, Arthur
Wallace, H. W.


Davies, Harold (Leek)
Lindgren, G. S.
Weitzman, D.


Dodds, N. N.
MacColl, J. E.
Wells, Percy (Faversham)


Ede, Rt. Hon. J. C.
McLeavy, F.
Wigg, George


Edwards, John (Brighouse)
Mellish, R. J.
Wilkins, W. A.


Evans, Albert (Islington, S.W.)
Mikardo, Ian
Willey, Frederick (Sunderland, N.)


Fienburgh, W.
Mitchison, G. R.
Willey, Octavius (Cleveland)


Finch, H. J.
Morris, Percy (Swansea, W.)
Williams, W. R. (Droylsden)


Fletcher, Eric (Islington, E.)
Moyle, A.
Wilson, Rt. Hon. Harold (Huyton)


Foot, M. M.
Mulley, F. W.
Woodburn, Rt. Hon A


Fraser, Thomas (Hamilton)
Orbach, M.
Wyatt, W. L.


Greenwood, Anthony (Rossendale)
Oswald, T.



Greenwood, Rt. Hon. Arthur (Wakefield)
Pannell, Charles
TELLERS FOR THE AYES:


Griffiths, William (Exchange)
Pargiter, G. A.
Mr. Blenkinsop and Mr. Donnelly.




NOES


Alport, C. J. M.
Buchan-Hopburn, Rt. Hon. P. G. T.
Duthie, W. S.


Amery, Julian (Preston, N.)
Bullard, D. G.
Fell, A.


Amory, Heathcoat (Tiverton)
Bullock, Capt. M.
Finlay, Graeme


Ashton, H. (Chelmsford)
Burden, F. F. A.
Fisher, Nigel


Assheton, Rt. Hon. R. (Blackburn, W.)
Butcher, H. W.
Fletcher-Cooke, C.


Astor, Hon. W. W. (Bucks, Wycombe)
Carr, Robert (Mitcham)
Fort, R.


Baldwin, A. E.
Cary, Sir Robert
Garner-Evans, E. H.


Barber, A. P. L.
Clarke, Col. Ralph (East Grinstead)
Grimston, Hon. John (St. Albans)


Bell, Ronald (Bucks, S.)
Cole, Norman
Grimston, Sir Robert (Westbury)


Birch, Nigel
Conant, Maj. R. J. E.
Hay, John


Black, C. W.
Craddock, Beresford (Spelthorne)
Heald, Sir Lionel


Boyd-Carpenter, J. A.
Crookshank, Capt. Rt. Hon. H. F. C.
Heath, Edward


Boyle, Sir Edward
Crosthwaite-Eyre, Col. O. E.
Hicks-Beach, Maj. W. W.


Braine, B. R.
Darling, Sir William (Edinburgh, S.)
Higgs, J. M. C.


Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)
Davidson, Viscountess
Hill, Mrs. E. (Wythenshawe)


Brooke, Henry (Hampstead)
Deedes, W. F.
Hinchingbrooke, Viscount


Brooman-White, R. C.
Doughty, C. J. A.
Hirst, Geoffrey




Holland-Martin, C. J.
Nicolson, Nigel (Bournemouth, E.)
Spens, Sir Patrick (Kensington, S.)


Hops, Lord John
Noble, Cmdr A. H. P.
Stanley, Capt Hon. Richard


Hopkinson, Henry
Orr-Ewing, Charles Ian (Hendon. N.)
Steward, W. A (Woolwich, W.)


Horobin, I. M.
Partridge, E.
Storey S.


Hudson, Sir Austin (Lewisham, N.)
Peake, Rt. Hon. O.
Strauss, Henry (Norwich, S.)


Hylton-Foster, H. B. H.
Pickthorn, K. W. M.
Sutcliffe, H.


Johnson, Eric (Blackley)
Pilkington, Capt. R. A.
Thomas, Rt. Bon. J. P. L.(Hereford)


Kerr, H. W. (Cambridge)
Pitman, I. J.
Thompson, Lt.-Cdr R. (Croydon, W.)


Leather, E. H. C.
Powell, J. Enoch
Thornton-Kemsley, Col. C. N.


Legge-Bourke, Maj. E. A. H
Redmayne, M.
Tilney, John


Legh, P. R. (Petersfield)
Remnant, Hon. P.
Turton, R. H.


Lindsay, Martin
Renton, D. L. M.
Vaughan-Morgan, J. K.


Linstead, H. N.
Roberts, Maj. Peter (Heeley)
Ward, Hon. George (Worcester)


Longden, Gilbert (Herts, S. W.)
Robinson, Roland (Blackpool, S.)
Ward, Miss I. (Tynemouth)


Lucas, P. B. (Brentford)
Roper, Sir Harold
Waterhouse, Capt. Rt. Hon. C.


Mackeson, Brig, H. R.
Ropner, Col. Sir Leonard
Watkinson, H. A.


MacLeod, Iain (Enfield, W.)
Russell, R. S.
Williams, Gerald (Tonbridge)


Macmillan, Rt. Hon. Harold (Bromley)
Shepherd, William
Williams, Sir Herbert (Croydon, E.)


Maude, Angus
Simon, J. E. S. (Middlesbrough, W.)
Wills, G.


Maydon, Lt.-Cmdr. S. L. C.
Smithers, Peter (Winchester)



Molson, A. H. E.
Smithers, Sir Waldron (Orpington)
TELLERS FOR THE NOES:


Morrison, John (Salisbury)
Smyth, Brig. J. G. (Norwood)
Mr. Studholme and Mr. Vosper


Nicholson, Godfrey (Farnham)
Spearman, A. C. M.

TRANSPORT (INCREASED CHARGES)

11.25 p.m.

Mr. Ernest Davies: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Railways (Additional Charges) (Amendment) (No. 2) Regulations, 1951 (S.I., 1951, No. 2194), dated 13th December, 1951, a copy of 'which was laid before this House on 14th December, be annulled.
I think it would be for the convenience of the House if this Motion and the two following were discussed together:
That an humble Address be presented to Her Majesty, praying that the Harbours, Docks and Piers (Additional Charges) (Amendment) (No. 2) Regulations, 1951 (S.I., 1951, No. 2195), dated 13th December, 1951, a copy of which was laid before this House on 14th December, be annulled.
That an humble Address be presented to Her Majesty, praying that the Canals (Additional Charges) (Amendment) (No. 2) Regulations, 1951 (S.I., 1951, No. 2196), dated 13th December, 1951, a copy of which was laid before this House on 14th December, be annulled.
I move this Motion because the Minister of Transport came to the House on 6th December last—the day before we adjourned for the long Christmas Recess—and informed us that he had received from the Transport Commission a request for increases in freight charges, which he had referred to the permanent members of the Transport Tribunal on 23rd November, and said that they had accepted the recommendation or request that these increases be made.

That recommendation was for a 10 per cent. increase in freight charges, and after the Minister had made his statement, his predecessor in office, my right hon. Friend the Member for East Ham, South (Mr. Barnes), asked for a debate on the matter. It was felt in various parts of the House that to announce so important a change in transport charges on the very day before Parliament adjourned—and which was to be imposed during the Recess—was hardly a courteous manner in which to treat this honourable House. However, we adjourned until 29th January, and the charges came into effect.

I would point out that during the term of the previous Government, when it was found necessary to increase transport charges—

Mr. Leslie Hale: I believe, Mr. Deputy-Speaker, that it was understood to be convenient if we discussed this Motion and the two following ones together. If I may, with respect, say so, I did not notice any observation from you. Are we, in fact, discussing the three Motions together and, if so, may I make this point'? It will be within the recollection of hon. Members that when these three Regulations were discussed together in the last Parliament they were discussed at four o'clock in the afternoon, and then occupied some considerable time because discussion ranged over a whole series of aspects. If taken together tonight, I hope that we may be allowed to go fairly widely even although, through no fault of ours, they are being discussed at this hour of the night.

Mr. Deputy-Speaker (Colonel Sir Charles MacAndrew): I am in the hands of the House. If it wishes to take them separately, well and good; but I think it would be convenient for the Motions to be taken together, and, if necessary, hon. Members can divide on each at the end.

Mr. Hale: Thank you, but there was one incident, probably by inadvertence, when the Closure was accepted on a number of Prayers, and had those been taken a little earlier in the day hon. Members would have been enabled to have a little more latitude. When these matters were discussed last year, I would remind the House, they occupied five hours and fifty-one minutes of our time.

Mr. Deputy-Speaker: I am not in a position to accept the Closure from anyone; I am in the hands of the House.

Mr. Davies: I thank my hon. Friend for his intervention. When the last Government gave time for the discussion of these very matters, a whole day of Parliamentary time was set aside for it, because a rise in transport charges, whether it be in freight or fares, is of the greatest concern to everyone. If freight charges go up the incidence on goods of all kinds is great indeed, because there is a transport charge at every stage of manufacture, whether it be on the transport of raw materials to the factory, the removal of the semi-finished article, or the transport of the finished article to the wholesaler and retailer. The effect on prices is serious, so that the public cannot but be concerned whenever there is an increase in charges.
It was for this reason that we hoped, when the Minister announced that there was to be a change on 31st December, that the Government would be able to find time to debate it. The Order was laid during the Recess, but since we returned on 29th January, the Government have made no attempt to find time to have the matter debated in the House, and it is only at this last minute—because the Government did not find time—that the Opposition has put down a Motion to enable us to debate it.
The action of the Minister in not finding time is made the more serious by his statement on 6th December. He pub-

lished in the OFFICIAL REPORT a memorandum he received from the Tribunal, and in which the Tribunal say, in paragraph 3:
If we may be permitted to say so the request for our advice as a matter of urgency has placed us in some difficulty.
It seems to me that the Minister of Transport acted a little precipitately in this matter for it was only on 23rd November, not a month after he had taken office, that he remitted this question of increased charges to the Tribunal. As the Tribunal pointed out, they were on the point of concluding a public hearing into a passenger charges scheme submitted by the Transport Commission when they received his letter.
They added:
We shall, therefore, in the reasonably near future have in effect to decide what, if any, additional contribution can be expected of passengers in relief of the evident financial necessities of the Commission. In these circumstances we do not think it would be right for us to enter upon any detailed discussion in this memorandum of the extent of those necessities.
That is to say, the Tribunal felt that this matter had been thrown at them at a time when they had other financial matters under consideration, and, therefore, they could not, and, in my view, were unable to, give adequate consideration to this matter.
I should like to ask the Minister what the hurry was in this matter. I am sure the right hon. Gentleman will make some attempt at an explanation, but I would suggest to him that there were many other considerations which might have been of greater value to the future finances of the Commission if he had delayed in this case. I would draw his attention to the last paragraph of the statement he made in the House—the more tendentious statement at the end of serious information about the rise in transport fares, there he was introducing partisan party politics. He said:
While this increase in charges is necessary, and cannot be avoided by immediate economies which it is within the power of the Commission to make, the House will be aware that the Government is not satisfied that the structure of the country's transport system as a whole is such as to secure the best and most economical service to the community. This whole question, which of course includes efficiency, is under close and urgent examination by the Government."—[OFFICIAL REPORT, 6th December, 1951; Vol. 494, c. 2574–7.]


If these matters were
under close and urgent examination by the Government
why did he take this hasty action of immediately raising charges by 10 per cent., and do so at a time when passenger fares were under consideration? During debates under the last Government, hon. Members opposite were continually attacking the transport system of the country and bringing forward grandiose schemes for improving its efficiency and its economy, and proposing decentralisation and the rest; but they have now been in office for several months and they have not made any suggestions except that of putting up charges and, more recently, of putting up fares—a step for which the Minister claims he has no responsibility.
He cannot avoid responsibility in the case of these charges because the Transport Act, as shown by the Order, gives him authority, in Section 82, to act precisely in the way he has acted—that is, to consult the permanent members of the Transport Tribunal and to accept their recommendation.
I do not share his view that he has no responsibility for the recent rise in fares, because under Section 4 (1) of the Act he has an over-riding responsibility for the Transport Commission and can give directions to it when required in the national interest. He told the House that he had no responsibility and that he could have acted in no other way, but I do not share his view.
When the Transport Commission asked the Minister for a rise in freight charges, I suggest that he should have delayed his decision. Coming fresh to his post, he should not have accepted so readily that the only way to meet the situation was to send charges chasing after costs, because as soon as charges are put up to meet costs, then costs rise even further and the inevitable result is that the Transport Commission claim another increase in charges.
There is another reason why action need not have been taken at that time. The Transport Commission had already done a great deal of work on the freight charges scheme. They have in preparation a scheme which in due course they will present to the Transport Tribunal, who will consider it; and it will come

into operation in one form or another. That means that in due course there will be further changes in freight rates. We are, therefore, having a series of increases which must be very disturbing to trade and industry.
We had a rise of 10 per cent. early last April, we had this 10 per cent. rise on 31st December and, as soon as the freight charges scheme comes into operation, there will obviously be further adjustments. It might well have been better, therefore, if the Minister had waited until the examination by the Transport Commission of their freight charges scheme had been completed and until the deliberations of the Transport Tribunal had been completed, too. By that time the Minister would have been able to give full consideration to the results of the review of the transport system of the country which he said was so urgent. Then we should have had one single measure dealing with this situation, rather than so many and so frequent bites at this cherry.
I want to point out that, in dealing with this question of transport charges, particularly in this case of freight charges and the increased charges in the docks and harbours and on the canals, in the other Regulations, one cannot consider them entirely separately from the finances of the Transport Commission as a whole, because the Transport Act lays down that the Transport Commission shall be considered as one undertaking. Section 3 (4) says:
All the business carried on by the Commission, whether or not arising from undertakings or parts of undertakings vested in them by or under any provision of this Act, shall form one undertaking, and the Commission shall so conduct that undertaking and, subject to the provisions of this Act, levy such fares, rates, tolls, dues and other charges, as to secure that the revenue of the Commission is not less than sufficient for making provision for the meeting of charges properly chargeable to revenue, taking one year with another
So the question of transport charges cannot be considered in isolation or out of relation to passenger fares and all the charges made by other Executives.
When the Minister considered this question of putting up freight charges he really should have taken into full consideration the question of the other charges the Commission were making or would be likely to come to him to have


increased or adjusted later. There was the question of the passenger charges scheme at that time before the Tribunal. Here he again, in complete independence, as it were, of the finances of the Commission, went ahead with raising freight charges.
The Commission consider the finances of all their Executives as one. They go into a common pool, and when the consolidated accounts are published the full details of the financial results of the different portions of the Commission cannot be given, as there is one single financial pool, in accordance with the Act that all their undertakings should be considered as one undertaking.
There is the further reason which makes me question whether it was really necessary to take this action so quickly, and that is, that we were then in the middle of what was proving to be a very mild winter; and during this period there was very heavy freight traffic being carried by the railways. Their takings are very much affected by the volume of winter traffic.
As it happens, the railways, during what is considered the peak 20 weeks of winter ending 28th January, carried a volume of freight traffic this winter greater than in any winter since 1948, and much higher than in pre-war years. This is true both of the originating tonnage and of ton miles. The coal traffic carried, for instance, due to increased production in the coalmines under nationalisation, rose from 3,886,000 tons in 1948–49, during these 20 weeks, to 4,187,000 tons in 1951–52, whereas the total in ton miles, which is the basis for assessing the amount carried by the railways, rose from 8,700,000 to 9,054,000.
This increased volume of traffic has been carried with reduced stocks of locomotives and reduced numbers of wagons. It has been much more efficiently organised through the railway unification which has been steadily taking place. The staff has also been fewer than in other years. The wagons held at marshalling yards and exchange points have been fewer, and traffic has been kept moving.
I refer to these matters to show that the railways, during the period when the Minister decided to increase the Commission's charges, were carrying a high

volume of traffic, and were doing so more efficiently and economically, than in any other comparable period. Why was it necessary to make this quick decision and to raise freight charges at this time? It might also be asked why, in spite of increased efficiency and more economic operation, it has been necessary to raise transport charges. There are several reasons, some of which were discussed during the debate on the British Transport Commission Bill about 10 days ago.
The main cause of the financial difficulties of the British Transport Commission is the inadequate replacement of permanent way and rolling stock, and inability to modernise the railways. Tills has resulted partly from the poor condition in which the railways were taken over following the wear and tear and their excessive use during the war; and as regards certain sections, the poor state they were in following pre-war operation under private enterprise.
The principal difficulty at present, however, is that the railways have been starved of capital investment. No doubt the Minister saw in "The Times" this morning the report of a speech made by the Chairman of the Railway Executive, Mr. Elliot, at a luncheon yesterday. He pointed out that it was probable that the railways would he able to fulfil only 65 per cent. of their normal construction programme for goods vehicles this year. I am not attaching, or assessing, blame, but only pointing out the difficulties confronting the railways, and finding out what action ought to be taken to overcome them.
What I am suggesting to the Minister is that the railways are suffering from the restrictions on the capital investment programme, and inadequate allocation of steel, particularly during recent months. This has compelled short-time working at railway workshops, and even the closing of workshops, with cessation of the manufacture of wagons. I would, therefore, suggest that there should be a review of the capital investment programme of the railways, and that there should be a fairer allocation of steel and of other materials to them. A large amount of rolling stock is required, and there is a particular need of diesel engines for shunting to enable the railways to operate more economically and more economic operation prevents further bur-


dens being imposed upon the travelling public and the shipper of goods.
I think a further explanation of the financial difficulties of British Railways today is that, of course, there has not been the speedy integration or co-ordination that one would have liked to see between the different sections of the Commission and between road and rail. It has not gone as fast as was hoped in the first days of nationalisation. Another reason is the large amount of traffic which has been lost from the railways to the road hauliers and to non-Commission road hauliers. That has been partly due to the C licence holders carrying their own goods, and also to the regrettable evasion which is taking place at the present time.
There is a considerable volume of traffic carried by operators under C licences, some of whom were operating previously and were bought out and compensated by the Transport Commission; and by those who are operating C licences held by their customers and not by themselves. I do not want to weary the House with details, but there are two very well-known ways in which there is evasion of the Transport Act whereby goods are being carried by road by what I might call "pirates." There is, for instance, the shipper of his own goods owning a C licence without owning a vehicle. He can hire a vehicle from a contractor, who operates under the shipper's C licence.
I do not want to go into all these details, and anyway it might get me out of order, though I would argue that charges by the railways are certainly very much affected by the amount of traffic which is lost by the railways to road vehicles which are not abiding by the Transport Act and, therefore, obviously not owned by the Transport Commission. That is relevant to the question of transport charges.

The Minister of Transport (Mr. John Maclay): Before the hon. Gentleman goes further, I should like to know from you, Mr. Deputy-Speaker, how I should handle this question when I come to reply. The hon. Member is going fairly wide of the Motion, and I assume it will be in order for me to follow him as far as he has gone.

Mr. Michael Foot: In the debate which took place on similar increases in the last Parliament,

held on 23rd April, a speech was made by the present Home Secretary in which he discussed at length the whole question of economies on the railways, and efficiency on the railways. There was no suggestion from the Chair that he was transgressing beyond the Regulations. These Regulations, I understand, are framed exactly in the same terms as those which were discussed on that occasion.

Mr. Geoffrey Bing: Mr. Deputy-Speaker, you will no doubt recall the debate referred to by my hon. Friend the Member for Devonport (Mr. Foot), because you were in the Chair at any rate for part of the debate. A whole day out of Government time was given for it, and it was opened by the right hon. and learned Gentleman the Member for West Derby (Sir D. Maxwell Fyfe), the present Home Secretary. He dealt specifically with the problem of road transport, and he argued that if he did not deal with that aspect of the matter, the general question could not be dealt with.
If these Regulations are looked at, it will be seen they are cast in precisely similar form to the No. 1 Regulations on which that debate was based. The only difference I can see between the two Regulations is that there is reference to amending Regulations here and the proviso to paragraph (4) is omitted. Otherwise, the Regulations are cast in the same form of words only, of course, the charges included are very much greater. So that surely, with great respect, criticism addressed to the lesser charges when we had a whole day's debate on the matter must surely be in order when addressed to the greater charges in these Regulations.

Mr. R. J. Mellish: Further to that point of order. I am personally interested in the Regulations relating to harbours, dock and piers, and a similar argument applies to increased charges, bearing in mind that it is a Regulation arising from the original Regulations in 1950. No. 702. When the debate took place on those Regulations, the whole question of efficiency in docks, and so on, in connection with which these charges are now to be applied, was dealt with.
I submit, with great respect, that if we are to discuss these Regulations in the


light of the extra charges now being made on the charges dealt with in the Regulation of 1950, No. 702, we are entitled to discuss the whole question of the relationship of these charges to the efficiency of the industry and so on.

Mr. Maclay: rose—

Mr. Mellish: The Minister will have plenty of time. I submit it would be a very good thing if we had a clear understanding on this point, because if it was possible for the Government, then in opposition, to have a full day to discuss the efficiency of the industry, then it is perfectly in order to do so now, because unless the efficiency of the industry is related it is difficult to argue about the charges.

Mr. Davies: Further to that point. A further point to be taken into account is that the Transport Commission have to act as a single undertaking. Therefore, everything relating to the accounts and finances of the Commission is really relevant to this debate, because the charges of one undertaking are certainly affected by the finance of the whole undertaking.

Mr. Maclay: I do not know whether it can go much further—I was not complaining. I was merely seeking guidance.

Mr. Ede: To re-assure the Minister, may I say that we shall not object to anything he likes to say or to how wide he likes to go in his reply?

Mr. Deputy-Speaker: I think that as far as road transport is concerned, we cannot deal with it in any detail. But I gather the hon. Gentleman was seeking to say the rise would not have been necessary had road transport not been skimming the cream of the traffic.

Mr. Bing: rose—

Mr. Deputy-Speaker: Perhaps I may be allowed to finish. We cannot go in detail into road transport. That would be out of order.

Mr. Bing: I beg your pardon. I was going to call your attention, Sir, to the degree of wideness to which the previous debate went. The hon. Member for Truro (Mr. G. Wilson) dealt in some detail with a section of the Railway and Canal

Traffic Act, 1854, in discussing what would be appropriate remedies for the position in which we then found ourselves. Anything wider than that it would be hard to find. I would respectfully suggest that if matters of that sort were in order, surely matters dealing with 1950 must also be in order.

Mr. Deputy-Speaker: If I was in the Chair on that occasion, I think I was blameworthy.

Mr. Davies: I am sure you are never blameworthy, Mr. Deputy-Speaker. I thank you for your Ruling, because you took the words out of my mouth when you referred to skimming the cream of the traffic. That was exactly the point I was making in arriving at my argument about the evasion which takes place by the carriage of goods by hauliers not operating for the Transport Commission. They skim the cream. A considerable volume of traffic is lost, and as a consequence much revenue too.
The instance, I was about to give was of road hauliers who own their own businesses getting customers to obtain C licences for carrying their own goods. That is to say, the haulier goes to a man who has a regular tonnage to ship and says: "You get a C licence—I can carry your goods in my vehicle." He does not go only to one customer but to a large number, and as he proceeds along the road he will switch one C licence disc for another according to the goods he happens to be carrying at that time.
In fact, he is acting as a road haulage operator quite illegally by having these C licence discs. I say that is quite illegal because under the Act the driver is supposed to be employed by the owner of the C licence, whether the vehicle is owned by the C licensee or by someone else; and here the customer tries to get round the Act legally by paying so much for the tonnage carried and so much for the driver's wages.
Here is a leakage which I urge the Minister of Transport to look into because it is making serious inroads into the finances of the British Transport Commission both by depriving the Road Haulage Executive of a certain amount of traffic and also by depriving the railways of some of this traffic which would otherwise go by rail.
These Regulations provide also for increased charges on merchandise carried by passenger trains as well as other charges. Passenger trains at present are, of course, inadequately loaded and they are not contributing their full share towards the Commission's finances. I do not want to go into the question of passenger fares because I am sure that would be ruled out of order, but the position here is that the same problems apply to the railways as regards the carriage of freight as they do to the carriage of passengers. Both sections of the system, both sides of the business of British Railways, are affected by this lack of capital investment which I have already raised.
What applies here might apply equally to freight charges. When charges are too high a very large volume of traffic is lost. In the case of the rise in freight charges in 1951, the Transport Tribunal suggested that there would be a loss in freight income of £9 million worth of traffic per annum from the railways owing to the increased charges. Of course we have a parallel example in passenger traffic, where an increase in fares invariably leads to considerable loss of traffic.
The transport operators often make the great mistake of having charges and fares at too high a level to attract the traffic; that is particularly so in the case with passenger fares. I should have thought that the Commission's finances would be considerably assisted if passenger fares were kept at a lower level and if more cheap fares were introduced rather than by allowing fares as well as freight charges to go up periodically as they are doing now. I should have thought it better for the Commission as well as for the pockets of the senders of freight and the travelling public to run full trains at a level the public can afford rather than half empty at high fares.
I suggest to the Minister that before fares or charges are raised any further—and I would much rather be pressing him to bring about a reduction, but I fear my persuasion would have little result—that the time has come for serious consideration of the financial structure of the Transport Commission. The Commission have proved very successful during the years since nationalisation as far as economic and efficient operation is concerned. Their goods traffic has improved.

Their cost of operation has been very substantially reduced, if one does not take into account the change in their employees working conditions.
In the past we had low freight charges and low fares because we did not provide the workers on the railways and other transport workers with the working conditions and wages to which they were entitled. They were badly paid, comparatively speaking, and their conditions of work were also bad. While the largest increase in costs has been for the improvement in wages and working conditions, wages are still low in comparison with a great number of industries, and there is still room for further improvement. Quite likely there will be a further demand for greater revenue to meet further increased costs, and further increased costs to the railways are inevitable following this week's Budget.
Petrol, although it affects mostly road transport and may well lead to a rise in bus fares, also affects British Railways because of their large collection and delivery service and their use of other vehicles. Although the Commission have done an exceedingly good job during the years since 1947 it has been revealed that with rising costs, with the granting of decent conditions to the workers they are up against financial difficulties, and will continue to be up against them. Each year they have operated at a loss. They have made a working surplus but have had a net deficit because of the high capital interest charges which result largely from the compensation which was given.
I am not for a moment suggesting that the interest charge, as far as the holders of transport stock are concerned, should be in any way changed, but I am saying that it is a burden which I am sure the Commission cannot continue to bear. The £44 million which is the main interest charge on British transport stock is at a level which is such a drag on the finances of the Commission that whenever costs rise there will be a demand for increased charges and fares to meet this charge. The Commission will never be able to carry out—or will have great difficulty in doing so—that Section of the Act which requires that, taking one year with another, it should balance its costs with revenue.
I suggest that the Minister, as he says he is making this close and urgent review of the transport system, should take into account the necessity for reviewing the financial structure, see what steps should be taken to eliminate the annual deficits which have accumulated so far, and see whether there is not some financial reconstruction which is necessary to relieve it of some of the burden of the capital charges.
I would further point out to him that he stated in the debate on the British Transport Commission Bill the other day that he wanted the railways to operate successfully and be financially successful, and he now indicates assent to that, but I would point out to him that he cannot operate British Railways in isolation. The very reason for nationalisation was to bring all the main transport of this country into one undertaking, to co-ordinate and integrate it so that the total revenue from the integrated system should be adequate to meet the costs of operation, and provide an economic and efficient system for the whole country.
If the right hon. Gentleman is considering any reconstruction of the transport system of the country, and if he is considering taking away from this integrated system—or the system which is working towards integration—any section which is profitable today, such as any section of the road haulage industry, or if he is even thinking of extending the radius of operation of the non-nationalised road haulage operators, then he will make it even more difficult for British Railways to pay and for the British Transport Commission to meet its deficit and for fares and charges to be held at their present level.
So I suggest to the Minister that, before he considers making any further changes in charges, there should be a thorough review, taking fully into account the greater efficiency and the economies which have been effected, the improvements in working conditions and so on. He should consider whether there is not a case for a fresh financial start so far as the Transport Commission is concerned, so that, in future, we do not have to be concerned with rises in costs bringing about alarming rises in fares and charges.

12.15 a.m.

Mr. F. Beswick: I beg to second the Motion.
I shall be very brief, and I use the term in its literal sense, and not in the special sense in which my hon. Friend the Member for Oldham, West (Mr. Hale) usually employs the term. I second this Motion because I believe that the increases in freight charges have a very special and vicious influence in the inflationary situation which faces us at the present time.
I put a Question on the Order Paper at the beginning of this year calling the attention of the Minister to the fact that one reason these freight charges had been necessary was because of a previous increase in the price of coal, and it was stated at the time when the increase in the price of coal was announced that one element in the increase was due to a previous increase in freight charges. I intended to ask the Minister whether, if the increase in freight charges, which was due in part to the increase in coal charges, which in part was due to a previous increase in freight charges, was not going to lead to additional increases in coal charges, and whether this increase would not also lead to additional freight charges.

Mr. David Renton: Bearing in mind that the hon. Member was a member of a Government which introduced the present system for fixing freight charges, and the present system for fixing coal charges, and that this process of freight charges and coal charges forcing each other up had been going on for two years, will he say, as a member of that Government, whether he contemplated that, as a matter of Socialist planning, that process would take place, or was he taken by surprise?

Mr. Beswick: I really do think that now, after six months of the present Administration, the Government should tend to consider proposals for altering a bad situation rather than that they should merely point to the fact that something happened under the Labour Administration. I do feel that, from now on, we should look for something to be done instead of hearing continually the story of what happened under the Labour Administration.
I was about to say that, due to the fact that we do not make such good progress with the answering of Parliamentary Questions nowadays, the Question to which I have referred was put off for a period, and during that time of postponement, we had questions about increases in coal costs; and we heard, also, of steel price rises. I should like to ask if the increases amounting to £11 million which the Transport Commission say they will incur in this calendar year include an estimate for the increases in steel and coal prices which, in turn, have been rendered necessary, in part, by the increase in freight charges. I should be glad if I could be told if this £11 million includes those items and, if so, how much they represent in the total.
I do hope that hon. Members opposite will not question my sincerity when I say that this matter affects both sides of the House; and I am sure that we all want to find a solution. But, there was another reason why I speak tonight and that is that when the Minister announced these increases, he said that he was giving close and urgent attention to the matter. He also said, in answer to a Question of mine, connected with aviation, that he and his Government "worked fast."
Those were his words, and yet it is now three months since he told the House that this Government, with a special brain brooding on the transport problem, in a sphere even rarer than that in which the Minster now moves, was giving "close and urgent attention" to transport problems. Therefore, can we now have the constructive and positive proposals which he promised to lay before the House in order to end the inflationary spiral taking place?
There are two other matters to which I would call attention. The Minister said that our transport system, the railways in particular, was in need of improved capital equipment. I would make the point that it is not merely in the sphere of physical equipment that the transport industry, and the railways especially, are behind the times. It is also, and I say this in no disrespectful way, the same so far as the personnel are concerned. I noticed in the 'Railway Gazette" a week or two ago that attention was called to the fact that out of one million people

employed in the transport industry, fewer than 100 earn £3,000 a year or more. I believe it is also true that out of the one million people employed fewer than 2,000 earn £1,000 a year or more. I do not believe that there is another industry in the country in which the proportion of highly-skilled and highly-paid men could be so small.
The difficulty is that the railways have been working on such a tight margin that, in trying to catch up with themselves, they have been unable to invest in capital investment or personnel the amount of money required if a constructive solution to this problem, which the Minister described as an economic service to the community, is to be obtained. I hope that the right hon. Gentleman will be able to tell us now, three months after he announced the increase in freight charges, how he proposes to end this vicious circle of increased charges leading to increased costs leading to increased charges.

12.21 a.m.

Mr. Michael Foot: I should like to begin by referring to some of the first remarks made by my hon. Friend the Member for Enfield, East (Mr. Ernest Davies), who moved this Motion. He referred to the circumstances in which this announcement was made by the Minister, and when he did there seemed to be some mutterings on the other side of the House, chiefly from the Patronage Secretary and several other hon. Members, who seemed to be mystified that we should be discussing this matter now. When it was suggested that it was the fault of the Government that we were discussing it now, there seemed to be some objection by hon. Gentlemen.
I should like to recall the exact circumstances in which this matter came forward. A statement was made on 6th December, the House departed on 7th December, and did not meet again until the end of January, when the charges were in operation. What we are now doing is to carry on the debate which should have taken place when we were in recess. This debate could have taken place on 8th December, 9th December or 10th December, and we could have discussed it earlier in the day. That was what the Opposition did propose at the time, and it was rejected by the Government.
Furthermore, if that course had been adopted, we should have had the advantage of discussing the charges before they came into operation. I do not know whether all hon. Gentlemen agree that it is a good thing to be able to discuss charges of this nature and importance before they come into operation. There may be a few who would object to that proposition, but few on that side of the House who could object to it, because when we were discussing the earlier set of charges imposed last spring by the late Government, many hon. Members insisted that it would be a great advantage if the charges could be discussed before they came into operation.
Among those who took that attitude, if I remember correctly, was the Parliamentary Secretary to the Ministry of Transport, who took the view that it was a good thing to discuss these charges before they came into operation. He protested that we were going on an Easter Recess and said this was a nice Easter egg to give to the people of the country—or words to that effect. He wanted to have the Easter egg opened before the Recess. That was a matter of going away for 10 days, but this time he was a party to sending the House away for—

Mr. Ralph Assheton: On a point of order. Mr. Speaker, is this in order?

Mr. Speaker: I think it is a somewhat long exordium. I hope the hon. Member will now come to the content of the Regulations.

Mr. Foot: I will certainly come to the details, but I think we have a right to recall the circumstances in which this debate arose and the reason we have to discuss the charges after they have come into operation instead of before.

Major H. Legge-Bourke: Has the hon. Member forgotten that one of his right hon. Friends, the right hon. Member for Fulham, West (Dr. Summerskill) introduced an Order dealing with seasonal workers in the middle of the Summer Recess and caused great inconvenience to a great many people?

Mr. Foot: I hope not to be out of order, and I certainly should be out of

order if I discussed all the seasonal Orders and the various times at which they were introduced at various intervals in the past six years. I will leave the matter there, except to say that there were difficulties why the previous Government could not have these matters discussed before they were introduced, for we were at that time engaged in the Budget debates. No such difficulty occurred this time.
Turning to the subject matter of the Motion, I do not think any hon. Member would contest the importance of the issue we are debating. It is a matter of first-class importance to the nation's industry as a whole, and for the country as a whole, and when my right hon. Friend the ex-Minister of Transport introduced the previous charges, in exactly the same terms as those in which we are discussing the 10 per cent. increase today, the present President of the Board of Trade referred to the "gravity" of the statement which my right hon. Friend had made.
There was a long discussion on my right hon. Friend's statement. The present Prime Minister said the 10 per cent. increase was a very heavy tax on the public. If the previous 10 per cent. increase was a very heavy tax on the public, then I presume the Prime Minister considers that this 10 per cent. increase is an even heavier tax on the public.
It was not only the Prime Minister who held those views, for there was another Member of the present Government, whose opinions on economic matters may be regarded as of greater significance—the Chancellor of the Exchequer—who said the subject matter of the 10 per cent. increase in freight charges was a vital matter which would affect the whole of British industry and commerce.
That is what we are discussing tonight, according to the present Chancellor of the Exchequer. In those same debates, the present President of the Board of Trade stressed the inadvisability of having to discuss these matters late at night. He appealed to my right hon. Friend to make plenty of time available in the day-time for such a discussion, and the Government acceded to his request.
So we have the extraordinary situation that at least half a dozen members


of the Government, and some of the most prominent—the Prime Minister, the Chancellor of the Exchequer, the President of the Board of Trade, and, coming down a little, the Parliamentary Secretary to the Ministry of Transport—were all agreed on the paramount importance of this question.
How was it, then, that a debate was not arranged? It seems to have been a great triumph for the Minister of Transport himself. He seems to have swayed all the other Ministers, including Cabinet Ministers, who insisted on the gravity of the subject, and that a debate should take place, to meet the convenience of his Ministry, and to allow the charges to be imposed before debate.
It was a great triumph for the National Liberal Party—a rather rare event. I think we all ought to celebrate the fact that the National Liberal Party were able to sway the opinion of other members of the Government and insist that Parliament should be packed off and that no debate should take place on this matter which the Chancellor of the Exchequer has described as of vital importance affecting the whole of British industry and commerce.
I should like now to deal with the remarks of the hon. Gentleman the Member for Huntingdon (Mr. Renton) but, unfortunately, he has departed. He intervened with a most childish interruption. He said we were discussing a problem that this party had created and which the party opposite were going to solve. He was so interested, he said, to hear the solution—and he was so interested to hear the solution he has apparently gone off. I should be prepared to await his return. I will come to his remarks if and when he returns.
When this matter was discussed before, when we discussed the previous increase of 10 per cent. in freight charges, what was the case put by the then Opposition who are now the Government? What was their argument against accepting that 10 per cent? Let us not forget that they voted against the whole proposition. There were several arguments, but they were all for the purpose of reinforcing one main claim. I do not think the Parliamentary Secretary will dissent from what I am saying. He took part, or was at least present, on that

occasion, and he will, I am sure, not dissent from my interpretation of the case.
Their main claim was that an inquiry should take place before the charges were introduced. Many different arguments, ranging over road transport and the finances of the Commission and the economies that might have been introduced—different arguments ranging over every other aspect of the field—were used to lead to that one claim, "You must give us an authoritative answer to all these arguments. Why not have an inquiry?"
What was the answer. It was, "We cannot have such an inquiry as that. It would take several months, by which time the finances of the Commission would be very much more seriously in deficit than they are at present. It is an impracticable suggestion, that we should have an inquiry before the freight charges are increased."
I am sure we shall not hear that from the Minister tonight. I am sure he will not tell us there has not been opportunity for an inquiry. I am sure he will not tell us the matter was so urgent he had to impose the charges without an inquiry. I am sure that will not be his reply because, although he is a National Liberal he is consistent, and I am sure he would not wish to stab the Home Secretary in the back in his absence—[Laughter.]—A very creditable feat, on account of the difficulty, that would be, I agree.
But we can put nothing beyond the achievements of the National Liberals after their achievement in swaying the whole Cabinet to their opinion in this matter. So all those arguments about there not being time for an inquiry and the urgency of having the charges increased were used against the claim for an inquiry, and the then Opposition had a single answer to all those defensive arguments.
They said, "We are not asking for a big inquiry which will take several months. You can easily have an inquiry, a quick inquiry." I daresay that some of my hon. Friends remember the debate in which the present Home Secretary said we could appoint a couple of business men, get them to look into it, and in a few weeks they would have something to put matters right. If it was possible to suggest in April last year that one could have such a quick inquiry, why is it not


possible now? There has been a matter of five months—November, December, January, February, and here we are, halfway through March—a matter of four and a half months. When the Home Secretary spoke in the debate on fares, even he did not suggest a four-and-a-half months' inquiry.
If the Government believed what they said when they were in Opposition, one would have thought that one of the, first things they would have done on coming to power would have been to propose a consultation between the Minister of Transport and the Home Secretary. The Home Secretary might well have said, "You remember what I said in the debate. We ought to have a quick inquiry." They might also have consulted the Chancellor of the Exchequer, who said that this was a matter which affected the industry of the country, and that something must be done. He might have said, "Let us have an inquiry as we suggested and voted upon in the House of Commons."
But it has not been done. It appears that the whole of that argument we had on that occasion was a fraud. It was just a trumped-up debate to say that this inquiry could be held. Many of us in this House did not believe it was sense for anyone to suggest that, with a great industry, having great ramifications, and which only a few years ago had been nationalised, an inquiry by a couple of businessmen could in a few days bring proposals to set things right and save £20 million being put on freight charges.
Therefore, the whole of that debate is exposed as a fraud, and it adds to the difficulties of the Minister of Transport this evening; because answers of that kind were given by the Government of that time, and it would be difficult for him to employ those exact words. I am sorry that the hon. Member for Huntingdon has not come back, but we will give him a little longer.
There is another reason why it would have been desirable for this House to have had a debate before these charges were introduced, or, as my hon. Friend the Member for Enfield, East, has put it, to say that it would have been better if this could have been delayed a little longer. There is a series of other factors which have since come into the picture, and which ought to be taken into the pic-

ture when the House is considering an increase of freight charges. Some of these were mentioned by the hon. Member for Enfield, East, but I should like to refer to a few more. Here again I recall some things which were said in the previous debate about a year ago.
The present Home Secretary, speaking then, talked of the effect of the new charges upon the lowest income groups, and the present President of the Board of Trade went on to say,
This type of increase bears most heavily on the people least able to bear it."—[OFFICIAL REPORT, 23rd April, 1951; Vol. 487, c. 142.]
That was one of the arguments employed then. Taking into account not only the effect of these charges on the lowest income groups, but also the other charges which are being imposed at present, it is clear that since the announcement was made by the Minister a quite new situation has arisen.
In particular, the problem of the low-paid workers is probably a bigger problem with the railways than with any other industry in this country. Ever since 1945 there has been tension inside the transport industry because of the low wages which are received by great numbers of railway workers. No one can dispute these facts, and since the Minister announced the new freight charges there have been some factors, and especially in the last few days, which have greatly influenced that situation.
I am told that roughly there are something like 100,000 railway workers getting a good deal less than £6 a week. I have worked it out that a railwayman with a wife will get £4 a year less, taking all the decisions in the Budget into account, as a direct consequence of the Budget. The railwayman with one child will get £12 less a year as a direct result of the measures introduced in the Budget.

Mr. Speaker: I do not know how the hon. Member connects what he has just said with the increased charges proposed in these Regulations.

Mr. Bing: On a point of Order. In the last debate which we had on this subject on the No. 1 Amendment Regulations, the right hon. and learned Gentleman, the Member for West Derby (Sir D. Maxwell Fyfe), now the Home


Secretary, when opening that debate, which occupied a whole day and was in Government time, dealt with matters very similar to what my hon. Friend the Member for Devonport (Mr. Foot) is dealing with at the moment. For instance, he dealt with the Guillebaud Court of Inquiry, which is very far from the actual question of the charges, and with such things as trade restrictive practices in the railway service.

Mr. Speaker: I cannot remember that debate with any clarity, but I am merely asking in the light of the present circumstances how the hon. Member for Devonport (Mr. Foot) connects what he is saying to these Regulations.

Mr. Mellish: If I may refer back to that debate on 23rd April, it was pointed out that these increased charges were related to the efficiency of the industry itself, and that they were also connected with the conditions under which people worked. My hon. Friend is only following the course that was set then.

Mr. Speaker: I can see quite well that on these Regulations it is relevant to discuss some of the expenses of the railways and also their efficiency, but I thought the hon. Member for Devonport was talking about the wage structure of the industry, and I could not see the relevancy of that.

Mr. Foot: I am very content to telescope my argument, Sir.
What I was saying was this. My hon. Friend the Member for Enfield, East, said—and this was one of the main arguments put forward about the Prayer—that it would have been advisable that the imposition of the freight charges should have been postponed for a period, because there are some new factors which should be taken into account when we impose such charges. He said that it was unwise and of no advantage to this House in dealing with these matters if we had to take several bites at the cherry, and he produced several arguments which showed that factors which have recently come into the picture should be taken fully into account when these charges are imposed. Therefore, he argued, it would have been to the

general advantage if the Minister had delayed the imposition of the charges a little longer.
What I am saying is that other factors which have arisen have made it advisable for the Government to postpone the imposition of the charges. As a result of the measures taken by the Government in the last few days, it is possible there will be a demand for increased wages in the railway industry in the coming months, and those demands are bound again to lead to some raising of the freight charges, because more than 50 per cent. and up to as much as 70 per cent. of these increased charges are accounted for by the demand for wage increases.
As a result of other measures taken by the Government, which they must at any rate have been contemplating when they introduced these new charges, they have taken action which means they will have to come back to this House and demand fresh increases in freight charges, unless, later, they are proposing to take some other way of dealing with this matter. I should have thought that argument must be in order, because it is addressed immediately to the reason why it would have been beneficial to delay the imposition of these charges a little longer.

The Speaker: I see the point the hon. Gentleman is making. I hope I am not too unreasonable in suggesting that if his argument is correct and the railways will be faced with greater expenditure because of the demand for increased wages, it seems a curious reason for denying them the increase which is asked now.

Mr. Foot: It might be a reason for denying the increase asked for now if it were thought it is a good thing that the increased expenses in the railway industry are to be met, say, every few months. One of the main arguments of the hon. Gentleman for Enfield, East, was that it is much better to have consolidation of the different reasons which may lead to different increases rather than to come every few months and make further erratic demands for increases in freight charges or passenger fares.
I do not wish to pursue that part of the argument very much further, but I would say that if any hon. Friend of mine wishes to pursue the argument that it would be better to have delayed these


Regulations until the full factors affecting the increased expenditure of the Transport Commission had become better known, it would certainly be in order.
As the hon. Member for Huntingdon is not here yet, may I turn to another matter which was discussed at great length in the previous debate and was also referred to by my hon. Friend for Enfield, East. He discussed one of the causes of the increased charges—of which we have had several in the past few years and of which we might have more in the future if some other course of action is not taken. He referred to the capital assets of the railways and the fact that they have not been able to improve those assets at anything like the speed they would have desired.
I think we have a right to have a very specific answer from the Minister. We had an announcement about capital investment during the last few days and we should be told by the Minister tonight what effect the Government's cut in capital investment is to have upon the railway industry, because that will certainly also affect the question of whether these charges are necessary and whether they are the right way of going about dealing with this kind of industry.
This matter was discussed at some length in the previous debate we had last April on precisely similar Regulations. There were many suggestions from the spokesmen of His Majesty's Opposition that we could make economies; we could save here and there and cut down branch lines and various other things. Some might have been possible propositions—some not so good. What was very strange in that previous debate was that they never seemed to look at the plans made by the Transport Commission itself. We have the report of the Commission for 1950 and the immense demands put forward by the Commission for assisting them in meeting this ever-increasing demand for freight charge increase.
The first demand is concerned with their arrears of investment. In fact, they are in a situation of having to do patchwork instead of replacing assets. I find that some hon. Members in that debate suggested that, of course, the nationalised industries were greatly favoured by the last Government and that they could not have any complaints about capital invest-

ment because the Government looked after the nationalised industries. That was not the case. Let me quote from the "Economist" of 20th October last, which said:
Transport certainly has not been treated as a favourite child.
That is a very moderate statement of the facts. The hon. Member for Enfield, East, quoted a statement of Mr. Elliot on this precise subject. I should like to quote a statement—which also confirms his claim—which was made by Mr. Valentine, the President of the Institute of Transport. He said in a recent speech that two-thirds of the present investment quota of British Railways is used
for track and other works essential to maintain safe running at existing speeds.
In fact, the railways have very little investment left over for anything which might properly be called modernisation. May I again quote the "Economist," which said:
The transport system creaks along, bearly able to maintain itself and is quite unable to improve its efficiency by the wise use of new capital.
That is the position of the railway industry of this country today. The railway industry is not only important for us in peace: it would be vital for us if the calamity of another war befell us. Therefore, we have a right to know, when we are being asked to agree to charges already imposed by the Commission, what aid the Government are giving to the Transport Commission to help it to escape from its difficulties.
One of the ways in which we can avoid the possibility of having a series of debates on increased freight charges and passenger fares in future is that more money should be invested in the railways; but we want to know whether this new investment cut of the Government does affect the railway system. I hope that the Minister of Transport will tell us. Many other hon. Members have tried at Question time to ask Ministers how these capital investment cuts affect different parts of our industry and we have a right to know what sum will be turned out because many people believe it is a crazy notion in the interests of defence to cut capital investment now and thereby, in the words of the "Economist," leave our British transport system "to creak along." That would not be a


defensive measure and it is not very good economy.
The hon. Member for Huntingdon is still not here, so perhaps one or two of his hon. Friends will be able to speak for him. He said that this transport problem, which results in frequent demands for increases in freight charges, was one that we on this side agreed that the Government would solve. Let us take the second part of the proposition first. If it is the claim of the party opposite that they are to solve this problem, then we shall be very glad indeed. The Minister should be grateful to us for providing an opportunity to state his solution. We are not suggesting he has a cast-iron solution, but we should like to hear a few tentative suggestions on how he intends to act. If he is not going to give us any tentative suggestions, then it is just as well that the hon. Member for Huntingdon was wise enough to depart.
We heard nothing of any solution of this problem while hon. Gentlemen opposite were in opposition. The only remedy they proposed then would have made the position very much worse. Now they are in office they may have to abandon that proposal. Perhaps that is one of the matters the Minister may refer to when he gets up to try to convince us that if this demand is accepted then we will not be faced with similar demands in the near future.
The hon. Member for Huntingdon suggested that any increase in coal charges leading to an increase in freight charges was due to this side. [An HON. MEMBER: "Hear, hear."] I am glad to hear one hon. Gentleman support the hon. Member for Huntingdon, but I do not think the party opposite really believe that to be true. However bold a face hon. Gentlemen may put on, I do not think they are so stupid as to imagine that the basic problems in our coal and transport industries were created by the nationalisation Acts.

Mr. E. Partridge: They were aggravated by them.

Mr. Foot: The hon. Gentleman is now retreating from the position taken up by his side. Before I have finished perhaps he will retire, like the hon. Member for Huntingdon.

Mr. Partridge: The hon. Gentleman makes me want to retire, anyway.

Mr. Foot: The hon. Gentleman can go home if he wants to—if his Whips will let him.
The accusation, if it means anything, was that there had been a greater increase in charges for nationalised coal or nationalised transport than there had been in private enterprise industries. That is not the fact. The increase in the charges on the transport industry are less than 100 per cent. as compared with prewar, and British coal is probably still the cheapest in the world. Therefore, it is very foolish for hon. Gentlemen to suggest that these increased prices and the spiral that has taken place is due to the operation of nationalisation when, at the same time, as we all know, the prices of many of the needs of the railway and coal industries have gone up, not merely 100 per cent. but 200, 300, 400 per cent. since 1938.
Hon. Gentlemen know that perfectly well. Therefore, it is a foolish argument. But I would agree on this much, that it is certainly desirable if at some point or another one tries to break the spiral by positive Government intervention. That, I think, was exactly the proposal of the previous chairman of the Steel Board. That was exactly what he wanted to do and was denied the right by the Government.

Mr. Speaker: Order. I cannot see what the Chairman of the Steel Board has to do with this.

Mr. Foot: I apologise, Sir. I am afraid that my parenthesis became somewhat extended, but I think the same principle applies to this industry.
I have always been in favour of the positive methods of subsidies—although the previous Government were not, and it appears the present Government are not, unless they are to announce their intention to intervene to try and stop this spiral of freight and coal charges going up by this method. I have always believed that that was the right course, and I believe it would be the proper course to follow in the present state, particularly as the President of the Board of Trade, speaking in the debate on 23rd April, 1951, said:
If we wanted to select one particular increase which would have a more dramatic


effect than any other in forcing up prices, it would be to put up transport charges."—[OFFICIAL REPORT, 23rd April, 1951; Vol. 487, c. 140.]
I think that was a gross-over-statement of the facts. The right hon. Gentleman says it does not really bear any relation to the situation. We expected that sort of thing from the right hon. Gentleman when he was in Opposition, and we still get a bit of it from him now he is in the Government, but there is a grain of sense in it, and the grain of sense is that, if we help to check the vicious spiral at one particular point, we should not be confronted time and again with the possibility of having to come back to the House and demand more money to be devoted to helping to deal with this industry.
It is very foolish for hon. Gentlemen opposite to suggest that the difficulties of this industry are due to nationalisation. They know it is not true. The noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), we know, holds highly original views of his own, and believes that we can have real cut-throat competition in the transport industry of this country, but I do not imagine that his views are shared by any of his hon. Friends. The noble Lord is in a difficult situation, because he is a believer in free enterprise and champions it with great eloquence and courage—and it does require courage, even in the days of a Conservative Government.
But the noble Lord, although an eager advocate of free enterprise, is also a good enough politician to know that he has no hope of seeing this industry handed back to private enterprise, and that is why he is so gloomy about it.

Mr. Deputy-Speaker (Colonel Sir Charles MacAndrew): If the hon. Gentleman is going into that, it will be rather outside the scope of the debate.

Mr. Foot: I am sorry, Mr. Deputy-Speaker, I was led away.

Mr. Martin Lindsay: On a point of order. Is there any precedent for an hon. Member speaking for three-quarters of an hour and still having six or seven pages of notes in his hand?

Mr. Deputy-Speaker: There is not a point of order. I can start speakers, but I cannot stop them.

Mr. Foot: If the hon. Gentleman had used his influence to get the debate in the Christmas Recess, we might have had it then.

Mr. Bing: On a point of order, Is it not right that the House should be reminded, in view of what the hon. Gentleman opposite said, that three hon. Gentlemen on the opposite side in the previous debate spoke for over three-quarters of an hour?

Mr. Foot: The fact is, and I think hon. Members on all sides recognise it—and I think the Minister of Transport stated it in the debate to which my hon. Friend the Member for Enfield, East, referred, and which dealt with transport matters a few weeks ago—that he has to accept the present situation and make the system work, and that there is a very good reason for that. I quote again from the "Economist," to which I referred earlier, and which said:
It is useless to talk of scrapping the Transport Act, if only because the railways, and almost certainly the bulk of the long-distance road haulage, would remain in public ownership for want of outside bidders.
That is the fact, and one of the reasons we have initiated this debate is because, following the previous debate on this subject, in which no indication was given by hon. Gentlemen opposite that they had the faintest inkling of the real problem, now that the Minister of Transport is in charge of this industry, now that, for a temporary period, we have a Conservative Government, we have a right to know whether they all hold the same views as they did in Opposition or if they have devised a new policy for dealing with this situation, and are going to come down to this House and ask for the charges to be put up.
I admit that I do not think we went far enough during the past six years in dealing with this problem. I think, as my hon. Friend the Member for Enfield, East, has said, we have to start on a bold policy of integration; but, as this industry is bankrupt—and that is not only the view of some hon. Members, but the view of the "Economist"—we should consider, instead of merely imposing these extra burdens on the industries and the consumers of the country, producing an absolutely new plan for this basic industry which was bankrupt when taken over.

1.5 a.m.

The Minister of Transport (Mr. John Maclay): rose—

Mr. Hale: May I call your attention, Mr. Deputy-Speaker, to the fact that we are really discussing three sets of Regulations, but that two have not been mentioned. If the Minister answers on all three, he will have exhausted his right to reply on points raised by my hon. Friends on this side on the other two—the Harbours, Docks and Piers (Additional Charges) Regulations, and the Canals (Additional Charges) Regulations. May we be told who will reply to discussion on those two?

Mr. Deputy-Speaker: I have not heard what has been said during the last hour, but previously, I heard both docks and canals mentioned.

Mr. Mellish: The Minister of Transport has a personal interest in this matter, and those of us with docks and harbours in our constituencies would like to hear something from him on these two Regulations. Are hon. Members like myself to be denied an answer.

Mr. Deputy-Speaker: With the leave of the House, the Minister can speak twice.

Mr. Hale: Surely this is an unprecedented situation. The debate last year lasted for a whole Parliamentary day, while now, apart from my hon. Friends who moved and seconded the Motion, only one hon. Member has spoken. Is it not unprecedented that, in such circumstances, the Minister should be called upon?

Mr. Deputy-Speaker: That is not a point for me. When a Minister rises, he is always called, and that is what I did.

Mr. Mellish: In view of the fact that so many of us are concerned with the other Regulations, Mr. Deputy-Speaker, surely the Minister should wait to sense the feeling of the House by giving other hon. Members the opportunity to rise.

Mr. Hale: Although, Mr. Deputy-Speaker, you have called the Minister, would he hold back while you call another hon. Member? After all, the Minister was the recognised expert during discussion on the Transport Act several years ago, and on other transport

occasions, on voyages around the islands and journeys to the Highlands, and the expert on piers and harbours. Surely he ought to wait to hear the views of hon. Members on that very subject, and it would be grossly discourteous for him to rise now. Let me remind the House again that a whole day was given to this same subject nearly a year ago.

Mr. Donnelly: I understood the Leader of the House to say yesterday that he was grateful to my hon. Friends for withdrawing some of their Prayers so that there could be a serious discussion on this particularly important matter. I am sure that the Minister would not like it to go on record that he disregarded many of the points affecting constituencies of hon. Members and the effects on the whole of a great industrial service; and that is something very germane to the cost of living.

Mr. Maclay: Let me say with all frankness that I have been astounded that three hon. Gentlemen should have been talking since 11.15 p.m. I have been watching for the substance of their speeches, with which I am anxious to deal. It has been interesting to see the width of colouring given by hon. Gentlemen who have spoken, because it was a little difficult to fix on the point they were interested in. Let me start straight off with the hon. Gentleman the Member for Enfield, East (Mr. Ernest Davies), who opened the debate. He developed rather a remarkable argument about the question of courtesy because he said, and he made great play with it, that it was discourtesy on my part to make a statement -and not give the House an opportunity of discussing it in debate.
May I suggest that it is remarkable that having said that, and having made a number of comments on the previous occasion, it is only tonight, at the last possible moment, that a Prayer has been put on the Order Paper. Hon. Gentlemen opposite made the further point that they had been waiting for the Government to give time for the debate, and referred to an occasion almost a year ago. They must remember that there were Prayers down on the Order Paper when that debate took place, and the circumstances were, if I remember correctly, rather interesting, in that the Prayers were taken in the afternoon. This time


there were no such Prayers on the Order Paper until this morning.
If I understand the situation aright, it was suggested through the usual channels to the Government that Government time should be found for this debate, in view of the fact that the late Government gave a whole day of Government time for a similar debate. I am afraid if that is the case the decisions of the usual channels did not reach my ears. Let us finish with this question of courtesy, because there is no parallel with last year, and there have been all these weeks since the House re-assembled in which this debate could have taken place. If there was real concern, and the speeches of hon. Gentlemen meant what they said this debate would have occurred weeks and weeks ago. As the hon. Gentleman the Member for Bermondsey (Mr. Mellish) knows, I would never be discourteous to him, because I know that he has a most genuine interest in the docks. The position being as it is I feel bound to get on with a reply to the debate.
The hon. Member for Enfield, East, and other hon. Members—

Mr. Ede: What does the hon. Gentleman mean by "reply to the debate"? If any hon. Gentleman gets up after the right hon. Gentleman sits down, surely the debate will continue.

Mr. Maclay: I hope I said the debate so far. [HON. MEMBERS: "No."] That was intended. There has been some discussion for a long time, but I meant the debate so far.
The main theme of the hon. Member for Enfield, East, was to inquire why I, after only a short period in office, and it was a short period in office, made this decision to come to the House with the statement I did. My answer, which will reply to a great many things said by hon. Gentlemen who have spoken, is that it was simply because, having found myself in office, I found that I had inherited a Transport Commission which was losing £750,000 a week. Could that be allowed to go on? I suggest that it could not. That was the position with which we were faced, and which had been left to us by hon. Gentlemen opposite. That had to be dealt with straight away.
How did those figures arise? I agree that they were not necessarily the respon-

sibility of hon. Members opposite; I should not argue that they were, because they were huge figures, as there had been big wage increases and big increases in prices in 1951. But how much is that the responsibility of the Government of the last six years? We have heard a good deal of talk about the inflationary spiral, and one hon. Member was frank enough to say he thought the Government should have done more to check the inflationary spiral. I entirely agree with him. What we are faced with is an industry which was caught in the inflationary spiral, which hon. Members opposite apparently completely failed to get under control in those six years—and that deals with the question of the hon. Member for Uxbridge (Mr. Beswick), too.

Mr. Foot: Would the Minister explain how he can accuse the last Government of being responsible for the rate of loss on the railways when, in the year before the industry was taken over, they were losing £60 million a year?

Mr. Maclay: I was pointing out that in the period after the war the Government of the day failed to check the inflationary spiral. There can be no argument about that; prices went up and up, and the great problem which we face is how to get that in check. I suggest that certain events of earlier this week are a very good sign that the Government are capable of tackling that problem and that they will tackle it.
The success of any Minister of Transport in the task of trying to get the railways on a sound basis must, to some extent, depend on the success of the Government in checking the inflationary spiral. I have supreme confidence that we shall check it. We have started on it. The measures which will be taken in relation to the railways and transport generally are things which, as I have said, are under close and urgent consideration—and close consideration should be given to many things before they are done instead of rushing in, with the results which we have seen in some cases.

Mr. Mellish: How can the Minister talk like that about trying to stop the inflationary spiral when the Budget increases the tax on petrol, which will send up fares? He said that this was a wonderful Budget which would stop the inflationary tendency. In a matter of a


few weeks we shall be asked for a further increase in fares. What is he going to do about that?

Mr. Maclay: The hon. Member is putting words into my mouth which were not there. It was a paraphrase. I do not think it would be right for me to get into an argument about the merits of the Budget.

Mr. Mellish: The hon. Gentleman started it.

Mr. Maclay: I agree that I started it, but it was a general answer to the general point, and all I was saying was that I ought not to develop it too far or I should be in trouble with the Chair.

Mr. Hale: On a point of order. Perhaps I could assist again. In the course of the last debate, the hon. Member for Henley (Mr. Hay), whom I do not see in his place, made a very severe attack upon the policy of Sir Stafford Cripps in increasing the price of petrol, which, he said, was one of the principal reasons for the Regulations, then being introduced. In those circumstances, is it not clear that the Minister need be under no inhibition about answering the very relevant question of my hon. Friend the Member for Bermondsey (Mr. Mellish)?

Mr. Maclay: I understood that the hon. Member rose to a point of order, or I should not have given way. I suffer from the disadvantage of a not unnatural desire, which I also had on the occasion of the British Transport Commission Bill, of wanting to talk about the subject we are discussing, and we are discussing these three Regulations.
Perhaps I may give a word of explanation, because hon. Members do not seem fully to understand what they are about. Before Christmas, I made a statement to the House, when I touched on the matter, and I will do so again. The position left to me was that losses were running at £750,000 a week. There were reasons for that being so. There was a passenger charges scheme before the Tribunal and it had been there for a longish time; and at that time there seemed to be no visible date on which it might be concluded.
There were £26 million of increased wages awards, which began in 1951 and were to take full effect in 1952. Of that

sum, £18 million was due to an award made by the Railway Staff National Tribunal as late as 7th November. There were also rising prices. I think the hon. Member for Uxbridge, who, I am sorry to see, is not here now, talked about £11 million. That was based on the assessment of the rise in prices in 1952. All these factors were present, and something had to be done to arrest that drain of the resources of the Transport Commission.
I followed the procedure I was bound to follow, under Section 82 of the Act, when asked to consider granting this increase. I referred the matter to the permanent members of the Transport Tribunal sitting as a consultative committee. That is what the procedure called for. When the hon. Member for Enfield, East quoted from the Tribunal's Report to me he read only that part of it where the Tribunal said:
The request for our advice as a matter of urgency has placed us in some difficulty.
He did not read on beyond that.
The next two paragraphs give the full statement, and I think the House ought really to realise what the position was. The Report went on:
We are on the point of concluding a public hearing into a Passenger Charges Scheme submitted by the Commission. We shall therefore in the reasonably near future have in effect to decide what, if any, additional contribution can be expected of passengers in relief of the evident financial necessities of the Commission. In these circumstances we do not think it would be right for us to enter upon any detailed discussion in this memorandum of the extent of those necessities.
Now comes the critical part:
All that we think it proper to say at this juncture is that as a result of the examination of the financial position and prospects of the Commission which the public inquiry has involved and of the additional information in the Commission's memorandum we are satisfied"—
and then it sets out that the Tribunal was satisfied that it should recommend and that I should approve the 10 per cent. increase.
The point I am making is that it was given consideration urgently because of the tremendous drain on the resources. The, Tribunal said that the
…the general considerations advanced by the Commission are, in substance, well founded.


That really must dispose of the whole question that there was undue haste or that there was discourtesy to the House or discourtesy to the Transport Tribunal, or—

Mr. Ernest Davies: What did the Tribunal mean by saying that the matter of urgency had placed it in some difficulty? If it had not been put as a matter of urgency, it would not have said so.

Mr. Maclay: The problem was it had not yet concluded the inquiry into the passenger charges scheme, and that, obviously, was a bit of a dilemma, but the over-riding problem was this £750,000 running out every week. The Report said:
There is at present no prudent alternative to an increase in freight charges aimed at providing in a full year additional revenue of the order of £20 million.
That body are the advisers under the Act. That was what it said. There was the situation which we found when we came into office. This transport scheme was the baby of hon. and right hon. Gentlemen opposite. There was the situation, existing partly for reasons out of the control of anybody, I quite agree; but there were other reasons which we are now examining closely because we are convinced that there can be great economies made in the whole transport system of the country. It is no use hon. Members asking me tonight to say precisely what they are, because I have no intention of telling them. We are examining all possible means of effecting economies.

Mr. Foot: I am sorry if I raised a point the hon. Gentleman is proposing to deal with. However, it is directly relevant. When his party were in Opposition they suggested that, before such increased charges were imposed, there should be an inquiry. They said it could be a quick inquiry, that would not take months, but a few weeks. Why did not the hon. Gentleman carry out what his hon. Friends proposed when they were in Opposition?

Mr. Maclay: These proposals were made at a time when the party opposite had been in power. They had started this Act. They nationalised the railways, the docks, and road haulage, and they ought to have known what they were doing. They had had time to have an

inquiry. We found an immediate crisis. [Laughter.] It is no good the hon. and learned Member opposite laughing, or was he stifling a yawn?

Mr. Bing: Will the hon. Gentleman allow me to interrupt?

Mr. Maclay: No, I cannot.
I will come now to the next point, the capital investment programme. We went into this last week, and I would not like to be guilty of tedious repetition. If we are going to have greater efficiency in the railways and in other things we need greater capital investment. I am as keen as anyone to get it for the railways, but they must take their proper place in the relative priorities in a time of desperate shortage. We fought for the railway allocation, as we ought to, if we are interested in them, and I am satisfied that the railways got their full and proper share of the available funds for capital investment.

Dr. Horace King: rose—

Mr. Maclay: I cannot give way.
Other points were raised, including that of the mild winter. It was a very peculiar reason to bring forward. What the hon. Member for Enfield, East, really suggested was that at the beginning or the end, of November one ought to be something of a necromancer; that one should have guessed that it would be a fine winter and that all the way through the traffic would move and the volume rise. We have vivid memories of a right hon. Gentleman opposite who, in a celebrated winter, did some necromancing and landed us in a mess.
We do not believe in that kind of necromancing. We believe that we have to deal with the situation as we find it That is what this government will do in every situation. Increased docks charges were necessary as the docks are faced with a difficult position. Many of them were badly damaged during the war, and it has not been possible yet to get done all the work which ought to be done.
I think it is a good thing, in relation to the turn-round of shipping in general, that my noble Friend has just announced the setting up of a committee to look into the whole question of improvements.


Out of that we shall certainly get more knowledge on the question of efficiency in the docks, how we can cut costs and possibly keep the rise of charges better under control.
I would also deal with canals, but no one has evinced much interest—

Mr. Hale: I would call your attention, Mr. Speaker, to that observation by the Minister. He is seeking to close the discussion with the remark that no one is interested in canals, although four hon. Members wished to talk about them.

Mr. Maclay: If the hon. Member had given me half a second I would have added, "as yet." The fact is that there were three speeches of great length, almost fabulous length.
Finally, let me say that with all seriousness that these Regulations are essential. I sincerely hope that hon. Members opposite have no intention of dividing against them, because it would be an extraordinary situation if they did. They would be striking at their own creation. They would be condemning it to heavy loss, and would be merely carrying greater responsibility for something for which I do not think they have any great reason to be proud.

Mr. Deputy-Speaker: Mr. Hale.

Hon. Members: Divide.

1.30 a.m.

Mr. Leslie Hale: So great is the noise and so disorderly the conduct of hon. Members opposite that I am not sure, Mr. Deputy-Speaker, whose name you called, but I believe it was mine.

Mr. Deputy-Speaker: I had called the hon. Member, and I might add that the call "Divide" is disorderly if carried to the extent it has been just now.

Mr. Hale: We are discussing freight prices and up to this moment only three speeches have been made. It was by courtesy of the Opposition and of my hon. Friend the Member for Enfield, East (Mr. Ernest Davies) that the House was permitted to discuss three important Regulations contemporaneously, but, after the recent disgraceful behaviour of hon. Members opposite, on matters of importance in future my right hon.

Friends will consider whether we can ever again accord to the Government the courtesy of saying that we will discuss three important matters contemporaneously and so assist the Government in economising the time of the House. [Interruption.] The heckling which is going on just now on the benches opposite is a little disgraceful in view of the fact that on the last occasion that these charges were increased there was a debate in this House.
The debate on that occasion was opened by the right hon. and learned Member for West Derby (Sir D. Maxwell Fyfe), who is now Home Secretary, and he described the whole issue as one of fundamental importance; as one which affected everyone in the country; and as one which, in particular, affected the lowest wage earners and the people suffering most at that moment. It was in his opening sentence that the right hon. and learned Gentleman made all those remarks.
On that occasion the three Regulations were taken collectively and were in precisely the same words as those we are now discussing. The only difference was that the figures then presented to the House were lower than those now presented, and those figures were substantially increased to overcome—[Interruption.] If any hon. Member opposite wants to make a speech in this debate we shall welcome it, and if he wishes me to give way in order to get some information from me on which to base his speech, I shall be only too happy to give way.
As I was saying, the previous debate was opened by the right hon. and learned Gentleman in the way that I have described. It was a debate of great gravity. I do not think that the Home Secretary is here tonight. The only thing that took place in that debate, which lasted five hours and 55 minutes—

Mr. Deputy-Speaker: If we go over the whole of the five hours and 55 minutes, we shall be out of order on these Regulations.

Mr. Hale: With very great respect, the whole purpose of this discussion is to find out what has happened in the minds of hon. Members opposite since 23rd April which has altered their views and has enabled them to present to this House a


series of proposals which they so roundly condemned then. The arguments which they put forward then are the arguments which I support now, and they put them forward much more efficiently than I can ever hope to do in this debate. I shall venture to adopt the reasoning of the Home Secretary as my reasoning, and it is for that reason that I must call the attention of the House to that debate on 23rd April.
Quite remarkable were the arguments put forward by hon. Members opposite in the course of that debate. I have already referred to the speech of the hon. Member for Henley (Mr. Hay). I am glad to see him in his place tonight. In particular, he pointed out the iniquity of the conduct of the late Government in increasing the tax on petrol. He called it a swingeing addition to the cost of petrol by Sir Stafford Cripps, although, of course, he had not been Chancellor of the Exchequer for some time before April, 1950; but still it was sufficient reason for—

Mr. Deputy-Speaker: I think that point should be postponed until Monday. I do not think it is in order on these Regulations.

Mr. Hale: May I mention this point. It is only two days ago since another swingeing addition has been made to the price of petrol, and that is a matter which has to be taken into account. We are surely entitled to ask the Minister whether it was taken into account when these Regulations were made, or whether he is going to come down to the House again and ask for a further amendment and whether we are going to hear the argument used last April by the present Home Secretary, that this is a continuous spiral which will go on for ever.
No one can accuse me of partisanship in this matter.—[Interruption.]—I am so glad to hear even a whisper of sound from hon. Gentlemen opposite who have been sitting silent for the last 2½ hours. In the debate on the first increase of fares in 1946, the Minister of Transport used the argument that it was a very real danger, and apart from that we were diminishing the losses of the private enterprise railway companies for which we should have to compensate them later on. There are three separate measures before the House tonight, and the first

one—I do not know whether the right hon. and gallant Member for Leicester, South-East (Captain Waterhouse) wishes to intervene or not. Well, would the hon. and gallant Gentleman shut up for a moment. There really should be some facility for hon. Members to address the House without constant interruption and noise from the other side.
I had the privilege of being a Member of the Committee on the Transport Bill together with the Minister of Transport. I am sorry, because I think he knows that personally I have a great respect for him, but I cannot congratulate him on his intervention tonight; not on the timing of it, nor the nature of it which gave no information to the House at all and made no effort to reply to the very important points put by my hon. Friends.

Mr. Maclay: But I did at least answer the whole question of what the Regulations were about.

Mr. Hale: I am going to deal now with some of the questions to which he did not refer. In the whole course of the debate on the Transport Bill the hon. Gentleman was expressing the keenest interest in the cost of transport. He was very keenly interested in the Calshot Ferry.

Mr. Deputy-Speaker: I do not think we can discuss the proceedings on the Transport Bill now. I listened to long speeches at the time because I was Chairman of the Standing Committee. I do not want to hear them again.

Mr. Hale: I am much obliged, Mr. Deputy-Speaker. The increase of dues will, of course, vitally affect transport to the island. If I may take another example, so that there will be no question of irrelevance, a few weeks ago I was in the Isle of Wight. I am sorry I do not see the hon. Member for the Isle of Wight (Sir P. Macdonald) in his place tonight, because this is a matter which vitally affects his constituency. I went there for the purpose of a broadcast. We saw in the course of our observations that transport to the island was a matter which vitally affected its welfare.
Last June I took over an 8 h.p. car to the island and the charge for transporting it was £3 12s. 6d. Now there is to be an increase in harbour dues both


at Portsmouth and at Ryde, and indeed in every port in the country. What is the result of that increase in charges going to be on the cost of transporting goods, passengers and vehicles to these islands which depend so much upon this facility for their existence and for the welfare of their people?
The hon. Gentleman said previously that no one had said much about canals yet. It may well be that the canal system of this country is going to become increasingly important in respect of the diminishing trade we can expect to operate under the régime of the present Government. It is the cheapest—it is one form of transport which operates without large expenditure on fuel. We have been told nothing at all about what the effect of these increased charges will be. No one who reads this Regulation can form a very clear view whether it refers only to those canals controlled by the British Transport Commission or whether it also refers to the cost of transport along the canals not purchased by the British Transport Commission. The two items are vastly different, and I think it is remarkable that the Opposition did not raise these points on the previous occasion when these same words were used in a previous Regulation.
Those who believe in the great traditions of the House and that full freedom of discussion and debate are essential matters vitally affecting the life of the community must have watched with the deepest possible concern the attitude of hon. Members opposite. They were so free to take time months ago when similar proposals were put to the House, but today there has not been a single Member who has been prepared to get up and make any observations upon this important matter. There has been one exception—in one hon. Member who took part in the debate a few months ago.
This is deeply to be deplored, for when we were in office we gave long and diverse facilities for debate which were freely accepted by hon. Members opposite. It is to be deplored that no one should have risen tonight to state the views of Government supporters on these important matters, if, indeed, there are any wholehearted supporters of the Government.

Mr. William Ross: In his statement the hon. Member referred to the Highlands and islands of Scotland. Is he aware that there is not a single Conservative Member for Scotland present tonight?

Mr. Mellish: It's a shame! Disgusting!

Mr. Hale: I have observed, for example, that the Kyle of Lochalsh is included in this Regulation and the question of access to some of the most favoured of the various islands of Scotland is also concerned. It is really a little surprising that this should be the position with hon. Members opposite, and it is very much to be regretted.
I did venture to suggest that it is quite essential in dealing with these matters to look at the general basis of these increases. It has been said that this is a continuous process. When coal prices go up transport charges go up, and when coal prices go up again so do transport charges. This is, after all, only a rather sudden realisation by hon. Members opposite of—[Interruption.] It is merely a recognition of a very ordinary economic process which we call inflation, and which, in fact, is concerned with almost every commodity of life and will affect every commodity of life.
We are quite entitled to ask the Minister tonight what his proposals are in the matter. Is he coming before the House to say that here the Government inherited another crisis, that there was a crisis in every Department when the Conservatives came in and that, having to face this inflationary situation, they have had to ask the House to take temporary measures? If so, we should have some figures dealing with the permanent measures likely to be taken, and we should be told when they will be introduced and what course they will take. The proposals for the denationalisation of road transport are not likely to reduce the burden on the railways, and that is the only proposal before the House. We must now consider once again, and for the third time since May, 1950, that we have to make a staggering, substantial and crushing addition to the burden of freight charges and of the cost of all goods transported by rail.
Everyone realises that the Transport Commission took over when it had


frightful arrears of wage increases, long overdue, which had to be met. Everyone realises there were special problems affecting the Commission, and that it took over at a very bad moment indeed. But that time has passed. Today one would have expected the Commission to be operating fairly normally in fairly normal conditions. As I understand the argument of the hon. Gentleman—and his reply was neither very clear nor very full—he says there has been this increase in coal and other charges, and therefore the Government are merely taking the ordinary course in inflation of letting the price go up. This is a very serious matter.
I am sorry we are not going to have the assistance of any hon. Member opposite, unless the hon. Member for Edinburgh, South (Sir W. Darling), means to give us his encouragement and advice. This course of inflation just cannot go on. The time is rapidly approaching when, unless this House exercises care and wisdom and does not sit and cackle at a quarter to two in the morning, but tries to discuss these matters at the proper time, we shall find ourselves in the middle of an inflationary spiral which no one can stop. I am a little shocked when most of us are looking anxiously at Paris and the hopes of preserving the integrity of the franc, when we are concerned at the widespread unemployment in Italy and wholesale disintegration—

Mr. Deputy-Speaker: I think we are getting rather wide of these three Regulations.

Mr. Hale: I accept your Ruling, but perhaps because of the interruptions my argument was not clearly heard and understood.

Mr. Deputy-Speaker: I heard it, I understood it, but I thought it out of order.

Mr. Hale: I did think I was merely giving an illustrative example of the effects of inflation, which I thought was apt because it is happening at this moment. But I will merely confine myself to what may well happen in this country. We may reach the point where the £ has lost its permanency and the whole country will suffer. So we have to consider with great care whether this matter should be allowed to pass unchallenged.
The Minister has suggested that our action was in the nature of an afterthought. I am surprised he does not know the facts. We sought the opportunity to debate this subject at a proper time, and our present course was taken only when these facilities were refused. Because of the very long Recess at Christmas, and then because of the sudden death of the Sovereign, we could not raise the matter as we did not want to press controversial subjects at that time. So we were placed in a difficulty, which everyone recognised, and, in that difficulty, we tried to meet with consideration the needs of the Government, and we agreed only a few hours ago to postpone a large number of Prayers so that we might have a full discussion on this matter.
I want to be brief, so may I conclude by saying that there are some points which the House is entitled to be informed about? I hope that my hon. Friend the member for Bermondsey (Mr. Mellish), if he is fortunate enough to catch your eye, Mr. Deputy-Speaker, will be able to deal more fully than I can with the matter, because of his close knowledge of the situation in the docks today.
What is the effect of these charges on the cost of transport? What protests have been received about this proposal from the islands? To what extent will these charges affect the cost of transport by barge of the canals, and what will be their effect in terms of tonnage? The question of real importance is what the Government intend to do about this transport system. Everybody knows what will happen in terms of what has happened before. We shall have these increases, and the higher charge will be passed on to commerce and industry, so that all this will result in further increases, and, finally, we are bound to face a situation in which they will be coming back every few months with further proposals for increases as a result of this all over again.
I ask the Minister to tell the House what his intentions and plans are, and, unless he is prepared to do that, we shall be in very great difficulty in not forcing a Division upon this matter. If he is prepared to give us the fullest information about his intentions, I am sure that my right hon. and hon. Friends will con-


sider it, in the light of what he says, with a view to co-operating in facing a situation of such obvious gravity and danger.

1.53 a.m.

Mr. R. J. Mellish: The Minister of Transport really did treat the House discourteously, because, after all, we have always regarded him as one who treated us with fairness and who put his point of view quite honestly, when he was in Opposition, particularly in anything connected with docks and harbours. We have always respected him in the past, because we knew he had a close interest in the docks industry. I believe I am right in describing the hon. Gentleman as a shipowner. That being so, it was unfair for him to get up in the middle of a debate dealing with transport charges and say that these charges are inevitable, because much of the transport taken over after the war was in bad condition, and that, therefore, the charges are fully justified.
What sort of a reply is that? Why are the charges justified? What are the details? What sort of a position has he found since he took over the Ministry? What are the intentions of his Ministry regarding more efficient working in the docks? None of these things were mentioned, but we are entitled to know. When the Minister was in Opposition, he quite rightly criticised the way in which some of our major industries were run.
Let us have a look at these Statutory Instruments, and, first of all, at No. 702 of 1950. The dock and harbour charges made there deal with dues on vessels on voyages made wholly between ports within the United Kingdom and the Republic of Ireland, and an additional charge was put on these vessels of 50 per cent. There was another charge of 50 per cent. on cargoes loaded at any port in the United Kingdom, a 75 per cent. additional charge by all authorised docks, and a charge of 100 per cent. on all other rates, dues and charges. That was in 1950, under Statutory Instrument 702.

Mr. Deputy-Speaker: We cannot discuss any other Statutory Instrument except the one before us.

Mr. Mellish: I must ask you, with very great respect, Mr. Deputy-Speaker,

to note that, unless I refer to the original Regulations, the House would find it impossible to follow the argument which I intend to put at a later stage.

Mr. Deputy-Speaker: We are not arguing about those details; we are concerned with an increase of 10 per cent.

Mr. Mellish: We are arguing about Statutory Instrument No. 2195 of 1951—the Harbours, Docks and Piers (Additional Charges) (Amendment) (No. 2) Regulations, and if one is talking about Regulations No. 2, one has to know what Regulations No. 1 stated.

Mr. F. A. Burden: Surely the new Regulations supersede the previous Regulations.

Mr. Mellish: That is about the most stupid observation I have ever heard.

Mr. Ede: If I could could help, I think I ought to say that my hon. Friend is pointing out that the cumulative effect is becoming intolerable and he was reciting the previous arguments merely to show what was the cumulative effect.

Mr. Deputy-Speaker: But we are discussing only the present 10 per cent. increase.

Mr. Mellish: We are arguing about the 10 per cent. rise falling within a year of a 75 per cent. rise, which was based on a previous 50 per cent. rise.

Mr. Bing: It might help, Mr. Deputy-Speaker, if I call your attention to the speech of the right hon. Gentleman who is now President of the Board of Trade on this very matter. On 23rd April last year, he went back a long way, saying,
We have had one demand already, which resulted in an increase of 16f per cent. last May.
Then he referred to
another 10 per cent. making a total of 28⅓ per cent., within a period of 12 months.
Then he asks:
Are they going to ask time after time for another 10 per cent?"—[OFFICIAL REPORT, 23rd April, 1951; Vol. 487, cols 141–142.]
Surely this was an argument on previous increases, and at that time all previous arguments were taken into consideration without, with respect, Sir, action by the Chair.

Mr. Deputy-Speaker: The Chair may have been found to have been more tolerant on that occasion.

Mr. Mellish: I have never known the hon. Member for Gillingham (Mr. Burden) rise on a sensible point of order.

Mr. Burden: If I may say so, it is very difficult, when the hon. Member is speaking, to put a sensible point of order.

Mr. Mellish: Perhaps I may be allowed, Mr. Deputy-Speaker, to say that there is a mutual affection between the hon. Member and myself because, when we fought each other in an election on one occasion, he lost his deposit against me.

Mr. Deputy-Speaker: That has nothing to do with a 10 per cent. increase.

Mr. Burden: No, Sir, but the hon. Member's remark merely shows the lack of wisdom of the constituents in that division, and his remark certainly has no bearing whatsoever on the matter we are discussing.

Mr. Mellish: But let it be remembered that, in the hon. Member's present constituency, there are a number of dock workers, and they might be interested in these charges. He implies that dockers are not very intelligent people, but they may bear that in mind at the next election.
But let me return to the point. There were rises previously. For example, the 60 per cent. went to 65 per cent., and the 100 per cent. went up to 120 per cent., and another went up to 92½ per cent. Now we come to the Regulations under discussion, and I am sure it will be appreciated why I wished to quote the earlier Regulations. The 65 per cent. charge goes up to 81½ per cent., the 92½ per cent. to 110¾ per cent. and the 120 per cent. to 142 per cent. And this by a great Tory Government, a Government which was going to reduce the cost of living—"Vote Conservative and everybody will have a free life for a short time" and all that.
These increased charges, of course, affect every branch of industry. What are they for? They are for dues for vessels trading between the ports in the U.K., Channel Islands and for cargoes loaded at any of the

ports in the U.K., Channel Islands or the Isle of Man, and any increase must, as even that hon. Gentleman the Member for Gillingham must know, reflect itself in other forms of industry. The Minister was hardly fair in brushing them off by saying that charges of this kind are justified.
The Minister mentioned that a committee, which he called the Port Efficiency Committee, had been established. I am not unhappy about it: I am all for efficiency committees. I hope that this Committee is efficient. At least one of the persons on it knows something about the docks, and that will be a change. What happened at the last minute? The efficiency of the industry was discussed in debate opened by the hon. and learned Gentleman the Member for Hornchurch (Mr. Bing) on 23rd April, 1951. The Minister of Labour, in conjunction with the Minister of Transport, worried as they are about the efficient working at the docks, has instituted this Committee. If it can do some good—if it can—these charges may go down.
On Monday this week there was a Question addressed to the Minister of Labour by one of his hon. Friends. I forget the hon. Gentleman's name, but the Question asked the Minister of Labour whether he had considered a report on the freight handling industry prepared by the Aims of Industry, Ltd. This is a body composed of business men, who have issued a report saying there is a shocking mismanagement at the docks and indicting the dock workers. As the Question was on the Order Paper I came to the House, but the Question was withdrawn and a Press handout was given out stating that this Efficiency Committee was to be set up. Why did the Minister of Labour do that? Why did he not leave the Question on the Order Paper and allow supplementary questions to be asked? Why did he want to hide it?
The trouble is that for a long time the docks industry has been accused again and again—at Tilbury, West Ham, my own area, Hull, Goole and other places—of inefficiency, that in comparison with their foreign counterparts they were not pulling their weight, that charges in the dock areas were exorbitant and foreign ships had to pay so much more here than they do elsewhere.
What are these charges going to do for the dockers? Some of the docks—


and I will not bother the House by reading all of them there are about 60 mentioned—are no use at all many are out of date and many should have been repaired years ago. When the Transport Commission took these places over, they took over a poor proposition. Because of that inefficiency, charges have gone up. The dock worker is being accused of not working so hard as his foreign counterpart, when, in fact, he works harder and better and under difficult conditions. I speak for dock workers generally, and they resent very much the charge which is constantly being made by such people as the Aims of Industry Committee and the British Chambers of Commerce that—

Mr. Arthur Lewis: And the Tories.

Mr. Mellish: Well, they are Tories.

Mr. Speaker: It is relevant to refer to the efficiency of the docks, but we cannot have the debate on these Regulations bringing in the whole question of dock labour. That would not do.

Mr. Mellish: With great respect, Mr. Speaker, we have argued this earlier, as you know. I am trying clearly to establish the point that it is no use indicting the men who are working in this difficult industry, under difficult conditions which are not of their making. It is no use suggesting that they are not pulling their weight and saying that we should have a special committee to investigate the way in which they work, and at the same time introducing this Order, which includes charges rising from 65 per cent, to 81½ per cent., from 92½ per cent, to 111¾ per cent. and from 120 per cent. to 142 per cent.
These things have to be taken into account, and I say there are other factors in dockland which the Minister could have mentioned in the few minutes for which he spoke. What about the shortage of craft? No mention of that; why did he not say something about it? What about the hundreds of man hours being wasted by men waiting for craft to turn up? What about the frustration of the men wanting to do the job but not having the materials with which to do it? The Minister did not say much about craft, because that is a managerial responsi-

bility; it is not the fault of the men that there is a shortage of craft. These men want the tools to do the job, and they have not been given them.
Take the case of the lock gates in the Royal Albert Docks in London? These gates have to be opened to let craft through. They are the responsibility of the employers. The employees, the dockers, are told to work with all they have got, to give everything they have got for this great country; that is the sort of thing hon. Members opposite say. What is the good of the employees working like that when they see the building contractors working on the gates—they are employed by private employers—working from 8.15 a.m. to 4.45 p.m.? Why are they not working night and day? If this work is required so urgently and if craft are held up while the gates are being repaired, how can we expect the dockers to believe that the Government are sincere about these things when—

Mr. Speaker: This is very wide of the Regulations.

Mr. Mellish: It is because these things have not been tackled before that we have these charges; that is the main reason for them. I have tried in the past, and I try now, to bring these things to the attention of the Minister. I see he has started to take notes; are we to assume that he is to reply again? I am sure that if he asks the leave of the House it will be granted.
These charges will affect almost every industry in the country. Consequently, charges will be made against the dockworker. Some other Tory organisation will point out that the charges have gone up and will say it is because of the dockers. Before these charges were introduced it should have been the duty of the Minister to see what could be done to improve the industry. I am certain of this: that the dock worker is as good today as he was in the past, provided he is given the tools with which to do the job.
Imports have been cut, and there will be a lot of unemployment in the docks. The so-called incentive given through the Income Tax will not interest them a bit, because there will not be any work for them to do. These are the men who have been criticised in this House in the past, and who, no doubt, will be criticised


again by hon. and right hon. Gentlemen opposite. They have had a difficult history. Now that a Tory Government have come into power they fear unemployment once again. The river front on which my constituency is situated is literally a bloody field of battle against the Tory Party and all they represent. [HON. MEMBERS: "Oh."] It is. I see the Parliamentary Secretary shaking his head. I do not know why he is sitting there tonight. He has not said a word—

Mr. Speaker: Order. There is no criticism of dock workers in these Regulations. The hon. Member has pursued that point, and I have allowed him to make it, but he must not pursue it further.

Mr. Mellish: With great respect, Mr. Speaker, there is an implied criticism of the dock workers, because there will be criticism of the dock workers because of the increased charges. However, I will conclude on this note. Unless something is done to improve the proficient working of dockland, and to ensure that the dock workers get a decent future—and they do not believe they will get it, because of these cuts in imports—the dock workers cannot be expected to give of their best, although in the main, I believe, they have always tried to do so.

2.12 a.m.

Mr. A. J. Champion: I can fully understand why the Government do not want this Prayer fully debated tonight. If I were in the Government's position in this matter I should try to prevent any debate taking place on it at all, and I can well understand why the Minister got up when the debate had gone on only for an hour and a half. I can also understand why, during his speech, he did not act as courteously as one expected of him, knowing the man, and did not give way to reasonable interruptions from this side of the House.
It is a very serious matter that this debate comes on at this hour of night. It is almost an insult to this great industry that the debate on it should take place at so late an hour, particularly as during the last two Parliaments time was always given at a reasonable hour of the day to permit us to discuss this sort of thing.
I have always had the pleasure of intervening in transport debates, and I have always intervened at a time when my brain was at its best. No one can pretend that after 12 o'clock at night his brain is at its best. I am sure that the brain of no hon. Member in any part of the House is at its best at this time of the night.
The railway industry is an industry which has cost this country about £1,000,000,000. What happens to it and how it is dealt with by the Government is of importance to the House and the country. I was surprised that the Minister complained that there was nothing to answer, and yet dared to get up to answer that nothing. He might at least have waited for more speeches before he rose to tell us that sort of thing. I noticed that when an attempt was made to interrupt him the Whips said, "No, do not sit down." He ought not to have obeyed those Whips. They were Tory Whips.

Mr. Maclay: I did give way.

Mr. Champion: I did not notice it.
All these things have been debated at a proper time under the past Government. I can imagine what would have happened if we had tried to do this when we were in power. Cannot we imagine what the present Financial Secretary to the Treasury would have said? What would the hon. Baronet the Member for Sutton Coldfield (Sir J. Mellor) have said if we had tried to get the thing through as the present Government are doing? What would the. present President of the Board of Trade have said? Having regard to his usual style in debates on transport, we can imagine him swinging from side to side and appealing to his hon. Friends.
I am sure that this Prayer is bound to succeed, and that these Regulations will be annulled. After all, has not there been appeal after appeal by the Prime Minister for political and national unity? Surely this is a matter on which we can have perfect unity, because all the hon. Gentlemen now sitting on the benches opposite have always gone through the Lobbies to pray against increased charges for transport. Therefore, I am sure we shall see all hon. Members opposite accompanying my hon. Friend the Member for Enfield, East (Mr. Ernest Davies), and the other hon. Mem-


bers who have spoken in support of the Prayer, into the Division Lobby. That will be an example of unity which will hearten the Prime Minister. I dare say that he will be here to participate in it.

Sir W. Darling: What about the Regulations?

Mr. Champion: I am coming to them, after dealing with some of the things which arise from the way this matter was presented and the fact that there is opposition to the Prayer.
These Regulations are of as great importance as those discussed on the 23rd April last, when the present Home Secretary said:
I do invite the House to approach this Motion with a responsibility appropriate to the grim problem of the ever-mounting spiral of the cost of living which faces our people."—[OFFICIAL REPORT, 23rd April, 1951; Vol. 487, c. 46.]
Let us face it in that spirit. I am prepared to face it with him in that spirit. The Minister of Labour, in an excellent maiden speech, referred to the fact that an increase of transport charges leads to a rise in the cost of commodities, and asked
is this spiral to go on without our attempting to do anything about it? Are we satisfied that we are doing our task?"—[OFFICIAL REPORT, 23rd April, 1951; Vol. 487, c. 61.]
Is the great party which hon. Members opposite represent satisfied that they are doing their duty in this connection? It perhaps is strange that I should be asking that, but it is only right, having regard to such statements that I should do so. The matters discussed in the debates of 10th May, 1950, of 23rd April, 1951, and this present debate are on similar lines. They cannot be divorced from what is happening in the world around, from what is happening in the whole of our economy. The Regulations we have before us were necessitated in part by the rise in railway wages.
My hon. Friend the Member for Devonport (Mr. Foot) referred to the fact that of the people working on our railways over 100,000 are at this time in receipt of wage rates which are less than £6 a week. Their position is, of course, serious. My hon. Friend the Member for Enfield, East, was right when he said that these Regulations should be with-

drawn and the whole thing reconsidered in the light of the events which have taken place since the Minister laid the Regulations.
We cannot close our eyes to the fact that something which has been done by the Chancellor of the Exchequer, will have serious repercussions on the whole of the 100,000 men who are in receipt of less than £6 a week. I know many of these men who are earning such low wages. They are platelayers and relayers and they are receiving £5 10s. 6d. a week. A man who happens to live in the same street as I do is in receipt—

Mr. Speaker: The hon. Member is really going too far into this question of the wages paid to railwaymen. As he said himself, no doubt it has something to do with the increase in prices, but that does not justify a long description of the wages being paid at the moment.

Mr. Champion: What I am doing, Sir, is arguing precisely the same thing that was argued by the right hon. and learned Gentleman who is the present Home Secretary, namely, that we cannot separate these Regulations from the wider events, including this rising spiral of costs which is taking place. That is why in this very brief part of my speech I was pointing to the fact that the Regulations should be withdrawn and all the circumstances looked at in the light of the fact that these very men about whom I was talking will be pressing on those who represent them immediately to stake a claim for a large increase in wages.
It will mean that the Minister of Transport will shortly be coming to the House again to cover the increase in cost which will inevitably result because of the rise in wages, which will be a consequence of the Budget. That is why I am suggesting that these Regulations should be withdrawn so that the whole matter can be looked at in the light of the changed circumstances. In the meantime, I hope the hon. Gentleman will endeavour to persuade his right hon. Friend the Chancellor of the Exchequer—and here I will end what I have to say about the Budget—that his Budget is a disaster to the lower paid transport workers, and will inevitably have serious consequences to the economy of the whole country.
This is a serious position. I recognise it as such and I feel that while it is right that charges should be raised in certain circumstances, on this occasion, if this matter goes to a vote, I shall vote for the annulment of these Regulations because of the reasons I have given. The points I have made are germane to this whole problem, and it is right that we on this side of the House should point out that which we have referred to tonight. The only regret I have is that they should have to be pointed out at this late hour.
The Financial Secretary to the Treasury, in the debate on 10th May, 1950, said, in reference to my hon. Friend the Member for Kilmarnock (Mr. Ross):
…the hon. Member's constituency will follow the way in which the hon. Member decides to vote with a perhaps rather unusual interest.—[OFFICIAL REPORT, 10th May, 1950; Vol. 475, c. 485.]
I feel sure that those who watched hon. Members opposite in their voting on 10th May, 1950, and 23rd April, 1951, will watch with unusual interest what they do tonight upon these Regulations which, in fact, they have brought before the House.
I cannot help ending by saying that I am sorry the Minister of Transport should have had to come here to hear the pounding which he inevitably had to get, when the man who is truly responsible for this happens to reside in another place. He is a noble Lord. It is said that leather is a substance made hard by tanning, but he will not get his hide very much tanned by any pounding he is likely to get in another place. The pounding has to be borne by commoner clay in this House. These Regulations should not have been made without greater consideration. They certainly should have been held back until after the results of the Budget were fully known, and all its consequences taken into consideration.

2.26 a.m.

Mr. Geoffrey Bing: There were a number of problems before the House when these Regulations were first introduced and the Minister of Transport added one further problem by his speech. I do not know why he ever saw fit to make it. He said that no one had said anything to which he need reply, and in these circumstances how was he

to get up and make it? That is not really treating the House with a great deal of respect.
In my constituency there will be some interest in the fact that the thing that most concerns the people living in Hornchurch—railways and charges—was debated by hon. Members at this time of the night when the Government were not prepared to give reasonable consideration to it. I think the real reason the right hon. Gentleman got up when he did was not that he could not answer the arguments from this side of the House—he knew that before he started—but that he was embarrassed because he might have been asked to answer arguments from his own side.
Less than a year ago there was a complete set of remedies—contradictory, but, nevertheless, remedies—presented by hon. Members opposite in regard to this matter. I refer to the Regulations we are considering. Paragraph 3 (2, ii) actually sets out the increased charges. If hon. Members will look at this and compare them with the No. 1 Regulations they will see that each of these charges goes up by 10 per cent. Where it was £20 it is now £22.
We were faced, when we debated these Regulations in April last year, with exactly the same situation.—We were faced with freight rise of 10 per cent. and hon. Members had a lot of remedies and reasons why the increase should not be made, why they divided the House against it under circumstances when the House was so evenly divided that they might have succeeded in having the Regulations removed. But they were prepared to take that responsibility for a series of reasons which they put down.
I do not suppose that the Parliamentary Secretary is going to say that some of the people on his side were particularly responsible. I think he should pay a little more attention to the advice given by the President of the Board of Trade. After all, if his hon. Friend is distinguished enough to be elevated to be President of the Board of Trade, at least the Parliamentary Secretary ought to pay attention to what he had to say on this important economic matter.
Let me deal with one or two other arguments some of his hon. Friends put forward. The hon. Member for Henley


(Mr. Hay) said that one or two principal matters were responsible for the charges we were facing last April—as I understood his speech, and it was not clear. The first was the increase in the price of petrol. This point has not been dealt with yet. The hon. Member for Henley said:
As to petrol, another element in this price rise, it was, of course, the previous Chancellor of the Exchequer, Sir Stafford Cripps who last year put that swingeing duty on petrol which the railways themselves, as well as the private road hauliers and the nationalised sector of the road haulage industry, now have to pay. If the Government are searching for new revenue, they ought, before deciding to put up the price of important raw materials like petrol and oil by imposing an increased duty, to remember and reflect upon the consequences of that duty so far as the transport industry is concerned."—[OFFICIAL REPORT, 23rd April, 1951; Vol. 487, c. 128.]
Hon. Members may have thought and reflected on the matter, but if they put up charges before they increased petrol charges and if there was anything whatever in what the hon. Member for Henley said, then, of course, they will have to face the further fact that charges will have to be put up again.

Mr. John Hay: I am sorry to interrupt the hon. and learned Gentleman, because he is so obviously enjoying himself, but I do think I should point out that my complaint, to which the hon. and learned Member has made reference, was that the previous Chancellor, Sir Stafford Cripps, had imposed that particular "swingeing duty" without regard to the economy, whereas the present Minister is bound to impose a similar charge now because the last Administration lost us Abadan.

Mr. Speaker: I cannot have this developing into a Budget debate.

Mr. Bing: I appreciate the point, Sir, but I do not feel that everything that could have been said on the last debate on the same subject was out of order and, therefore, I am confining myself strictly to what was said last year, so that by debating points used then I can get some answer.
All I am saying is that if the hon. Member was right in saying last year that the price of petrol would affect freight charges, then this is a matter which must be taken account of now, because, presumably it was not to the

Parliamentary Secretary that the Budget cuts were disclosed in December. Presumably, too, when his hon. Friend made the Regulations they were not aware that this step was to be taken. Thus the hon. Member for Henley was quite wrong in his calculation. He went on:
I now pass to the major topic—the wages paid by the transport industry…what we on this side object to very strongly is the way the whole business was managed by the Government."—[OFFICIAL REPORT, 23rd April 1951; Vol. 487, c. 128.]
How is it managed by the new Government?

Mr. Hay: We shall certainly not do what the right hon. Member for Ebbw Vale (Mr. Bevan) did, which was to intervene in an arbitration between the Railway Executive on the one hand and the railway Unions on the other and order the Railway Executive to pay £12 million increase in wages when the independent arbitration had said that only £6,500,000 should be paid.

Mr. Mellish: Does the hon. Member realise that that action resulted in the avoidance of a national dispute which would have cost this country millions of pounds?

Mr. Bing: It is very valuable that we are getting—if only from a back bench—some indication of the views of the party opposite. They are quite prepared to allow the country to drive into chaos. However, I do not want to pursue the hon. Gentleman. He will have an opportunity of putting his own point of view. He dealt at some length with my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) last time. If he wishes to pursue the same course the House is at his disposal.
I want now to deal with the five principal points made by the President of the Board of Trade in the debate last April. The first point he made was the same one as was made by the present Home Secretary. I do not know whether these were serious points because these Regulations are no answer to any of them. He said:
May I repeat one of the points which he put?"—
That was the right hon. and learned Gentleman the Member for West Derby (Sir D. Maxwell Fyfe)—
He asked that there should be an independent and expert inquiry into this great railway industry


He went on to say, after dealing with the various arguments:
Let them have their 10 per cent. and let it be on condition that the right hon. Gentleman will come to that Box and say that we can have the independent and expert inquiry."—[OFFICIAL REPORT, 23rd April, 1951, Vol. 487, c. 133.]
My first point is this. Has an independent and separate inquiry been set up now? If it has why has there been no announcement to the House, and if not, why has there been this change of policy?
The next point is that the President of the Board of Trade dealt with the reference to wages and some valuable points made by my hon. Friend the Member for Swansea, West (Mr. P. Morris). Speaking of the limit on railway wages he said:
Today he said that if we were dependent on the profits which were to be made in the railway industry, there would not be very much chance of anybody getting a decent living out of it.
And he went on:
We could not agree with him more about that: There is not the slightest doubt that we shall not get much out of the profits made in the nationalised railway industry."—[OFFICIAL REPORT, 23rd April, 1951, Vol. 487, c. 134.]
That is one of the reasons why, when we considered this matter, we did not consider it on the basis of the railways alone but on the basis of the whole integrated transport system. But if we are going to hand the road haulage part back to private enterprise then the part from which a great part of the profits would go to pay this increase will depart, and what charges will the railways then have to make to meet their overheads? The King's Speech gave us no guide to any possible legislation in this direction. We ought to know whether we are debating these charges on the basis that they are going to be only for the railways.

Mr. Mellish: Will the hon. and learned Gentleman also take into consideration the fact that the road transport section of the industry is threatened with denationalisation? This has unsettled the workers in the industry? What is to happen to the railways then?

Sir William Darling: That is most important.

Mr. Bing: I am glad I have agreement from both sides of the House.
It is an important point for people who are working in that industry, and who know something of what are to be their prospects of promotion and increased wages, though it may not seem important to some hon. Gentlemen opposite. We are, after all, concerned with transport in this country, and I should have thought that, next to housing, transport is something—certainly it is in my constituency—which bears most heavily on the lives of the ordinary people. I should be willing to stay here two nights if necessary so that the matter could be adequately discussed.
I come now to the third point made by the President of the Board of Trade. After quoting from the speech of my hon. Friend the Member for Perry Barr (Mr. Poole), he said:
He said that the railways were like a sick child—a very sick child,' he said. Well, if you have got a very sick child, Mr. Deputy-Speaker, you do not stand back and say 'It will come out all right. Probably by 1954 he will be all right.' That is apparently the policy adopted by the Government. You get a doctor you call in the experts, and try to find out whether there is anything you can get to make the child a little better. That is exactly what our intention is in asking for an inquiry—
Is it the intention still to have this type of inquiry, or have they abandoned the plan of the President in regard to rail services?
Then, the right hon. Gentleman went on to deal with another issue which I am surprised the Minister did not deal with at all. It concerns a very important subject which was discussed at some length in the previous debate. What are the charges that should rightly fall on the railway services? What is the position in regard to strategic lines. The President of the Board of Trade said:
It is a very difficult thing to determine. It must always be difficult to decide how far a line is essential from the point of view of military defence and how far from the point of view of ordinary transport needs of the country It is certainly not a matter upon which one could make up one's mind across the Floor of the House. It is a matter at which we shall have to look.
That was nearly a year ago. Have they looked at it yet? We never get a straight answer. They only say that it is one of the things they overlooked or that it is a matter at which they have looked and decided to do nothing about it. The right hon. Gentleman went on to say:


I may say that we should look into this matter very closely. There are all sorts of interests—naval, air and military—to be taken into consideration."—[OFFICIAL REPORT, 23rd April, 1951; Vol. 487, c. 138.]
What more charming subject for discussion in the Cabinet presided over by the Prime Minister? His valuable suggestions would be available, and the whole issue could be dealt with.
Now, I come to the fifth point made by the right hon. Gentleman, and it was an extremely interesting one. He argued that, if we increased the railway charges beyond a certain point, we then get no increase at all, and, in fact, we get a certain diminution. His economic thinking may be entirely at fault, but, of course, his case was not, and was made very clearly. It is no use increasing railway charges because it would not bring additional revenue. Suppose that he is wrong about his first 10 per cent. May he not be right about the next 10 per cent.? There must ultimately be a point where the President of the Board of Trade is right.
Finally, the point made by him with which I agree was a warning to the House. In speaking of the speech of my hon. Friend the Member for Nottingham. East (Mr. J. Harrison), he said:
The final point raised by the hon. Gentleman, and one with which I agree, was a warning to the House. He said, coming to this matter of diminishing returns, that there is a limit to the extent to which we can raise prices to the consumer, even in a partial monopoly of this character."—[OFFICIAL REPORT, 23rd April, 1951; Vol. 187, c. 138.]
Is that the view of the Parliamentary Secretary? Does he believe that? If he thinks there is a limit, is it the same limit as the President of the Board of Trade, or does he fix it at another point? If so, what is that point?
Then, the right hon. Gentleman went on to say that this is a type of increase which falls most heavily on the people least able to bear it. Is that the opinion of the hon. Member who is to reply? Does he think that this is an increase bearing most on the people least able to bear it? Either the President of the Board of Trade spoke complete nonsense such as should not have been made in this House by a responsible Member, or else it is true that hon. Members opposite have placed a charge on those people

who can least bear it. He said that it hits the special areas, those very places where industrialists had encouraged the introduction of branch factories to diversify industry in a particular area.
Is that the view of the Parliamentary Secretary? Does he think that these charges will hit most the development areas—those areas where, if we have unemployment, it is most likely to be seen? I am not going to weary the House with going through the very long speech made on that occasion by the present Home Secretary, but at least I must say that I am surprised, since he took so much interest on the previous occasion, that he is not here to listen to the answers to the interesting points he made.

Mr. Ede: He is detained in Wales.

Mr. Bing: Perhaps, and we appreciate his difficulties.
But, leaving the right hon. and learned Gentleman, these matters ought to be discussed. Perhaps they have been discussed in the Cabinet, and although it is not the policy of this party to discuss the private papers here and there, I would ask if the Government have rejected entirely the arguments of the present Home Secretary. Have the Government decided to have an inquiry; has that been decided already, or is it to be decided at some time in the future? What are the Government doing about the strategic railways? What about wage negotiations?
All these matters were discussed in a long, nearly six hours' debate, in time given by the Government, and we answered questions about the way that they should be dealt with. Yet, right hon. and hon Members opposite voted against the Regulations; now is their opportunity to give an answer. Are we tonight going to have the real answers from the Parliamentary Secretary or is he going to copy the Minister of Transport?
This is perhaps the most important issue of all issues before the country as a whole because, unless we have an efficient transport system we are going to have this continually rising spiral of costs. Transport charges form the one thing which, in every home around London, and other great cities, is bearing down on the ordinary people. Here is


another point; perhaps we should make the freight charges heavier and take some weight off the man with the suburban season ticket.
There are people in my constituency who are paying almost twice as much as before, and it is not satisfactory for the Government to try to brush all these matters away in the middle of the night, and put up a Minister who says, "I do not know the argument; I do not know what I am supposed to reply to, but here I have a prepared speech, and I hope that nobody puts anything against it."
I beg hon. Gentlemen opposite to join in the debate, or, if they do not join in it, to use their influence on their friends on the Government Front Bench to give a sensible and serious answer to the points raised. Let us have an answer to the five points raised by the right hon. Gentleman the President of the Board of Trade and to some of the back bench points, but let us have an attempt to grapple with this difficult problem.

2.51 a.m.

The Parliamentary Secretary to the Treasury (Mr. P. G. T. Buchan-Hepburn): The Parliamentary Secretary to the Treasury (Mr. P. G. T. Buchan-Hepburn) rose in his place, and claimed to move,
That the Question be now put.

Question put, "That the Question be now put."

The House proceeded to a Division.

Mr. STUDHOLME and Mr. REDMAYNE were appointed Tellers for the Ayes, but no Member being willing to act as Teller for the Noes, Mr. SPEAKER declared that the Ayes had it.

Question,
That an humble Address be presented to Her Majesty, praying that the Railways (Additional Charges) (Amendment) (No. 2) Regulations, 1951 (S.I., 1951, No. 2194), dated 13th December 1951, a copy of which was laid before this House on 14th December, be annulled,

put accordingly, and negatived.

Motion made, and Question,
That an humble Address be presented to Her Majesty, praying that the Harbours, Docks and Piers (Additional Charges) (Amendment) (No. 2) Regulations, 1951 (S.I., 1951, No. 2195) dated 13th December 1951, a copy of which was laid beore this House on 14th December, be annulled.—[Mr. Ernest Davies]—
put, and negatived.

Motion made, and Question,
That an humble Address be presented to Her Majesty, praying that the Canals (Additional

Charges) (Amendment) (No. 2) Regulations, 1951 (S.I., 1951, No. 2196, dated 13th December, 1951, a copy of which was laid before this House on 14th December, be annulled—[Mr. Ernest Davies]—
put, and negatived.

EQUAL PAY

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Redmayne.]

2.54 a.m.

Mr. Cyril Bence: I now wish to bring before the House the important subject of equal pay. I understand that in 1919 this House accepted a resolution on equal pay in the Civil Service. That was 33 years ago. I remember reading once that it was the general opinion that from the birth of an idea to its application took 35 years. On that reckoning we should establish equal pay for women in the Civil Service in at least two years and, I hope, extend it to the teaching profession and local government authorities. I do not intend to keep the House for long, as several of my hon. Friends are anxious to contribute to the discussion. They have expert knowledge of the implications of equal pay on the Civil Service.
In some branches of the engineering trade, the principle of the same rate for the job for both men and women has been established for many years. When the price for a job is fixed in certain branches of the engineering trade, with both men and women working on the job, the unions have succeeded in establishing the principle of one rate for the job—irrespective of whether men or women are employed.
For 33 years we have been having statements that all political parties, all candidates in their constituencies, accept the principle of equal pay; in other words, they accept it in the abstract. The women of this country are getting fed up with this. After 1918 they were complimented on their great work during the 1914–18 war. They were complimented again for their great work in the last war. Since 1945 everybody seems to have been promising them equal pay, in principle. The women are tired of this.
They want to know when they will get equal pay. How long must they wait? Various excuses are given, and when I


look back at the excuses it seems to me—this may be a superficial appearance—that when the finances of the country were good, equal pay could not be granted because the trade of the country was always bad; and when the trade was good, and there was full employment, they could not be granted equal pay because the finances of the country were bad. No matter what the conditions, it seems that equal pay cannot be granted to women in the Civil Service, the teaching profession and local government service.
I understand that the Civil Service do not demand the immediate application of this principle of equal pay, but are prepared to accept the gradual implementation of this pledge which has been given to them for so many years. It is a pledge which no Government seems prepared to implement.
It is an extraordinary fact that entrance into the Civil Service and into the teaching profession demands no discrimination of sex. There is no discrimination in training or in examination—none whatever. Many are trained and educated in co-educational establishments. All take the same examinations. All go through the same training. It is only after they have entered the Service that there is this differentiation—this difference in the rate of pay according to sex, even where they are doing the same job.
If this delay continues much longer, and if politicians—Ministers and candidates—continue to go round the country persisting in the statement that they accept the principle but cannot implement it because of the conditions—a different set of conditions each time—then the time will come when the women will band together in a strike at the ballot boxes, and let us remember that they are the majority in the nation and we shall not be able to find a Government, or else we shall have perpetually a minority Government elected by men and, remembering the stories of the suffragettes, I dread to think what will happen to us men in that situation.
So I beg the Government to take steps immediately, in consultation with the Civil Service, the teaching profession and local government, to draft some scheme so that, in the next two or three years, we shall be able to demonstrate that something once propounded can be carried out with-

in 35 years, and so that at last women can have equal pay for equal work.

3.1 a.m.

Miss Irene Ward: I am very glad indeed that the hon. Member for Dunbartonshire, East (Mr. Bence) was fortunate in the ballot and has had the good sense to raise this question tonight. I do not intend to intervene very long because I realise that it is his Adjournment and that it would not be right for me to take up time which really belongs to him and his hon. Friends. However, this is a non-party matter. The hon. Gentleman's party and my own, as well as the Liberal Party, have paid lip-service to the introduction of equal pay for very many years.
It is disappointing to me and to many of my hon. Friends that in this year's Budget the Chancellor of the Exchequer has been unable to take the very modest step that was suggested to him when the civil servants went to see him to press him to introduce equal pay by graduated steps.
I want to say one word to the Financial Secretary to the Treasury. I do hope that, when he replies to the debate, he will not use the arguments that, I see, were used to the representations of the civil servants on that occasion. I notice that same old argument was used about "inflationary pressure." Considering the concessions the Chancellor has made in the Budget—a great deal of which, of course, I approve of—to the general body of taxpayers, I think that to talk about the small expenditure on equal pay in the initial year as being "inflationary pressure" is just begging the question.
I see the other old chestnut was trotted out, too, about the question of repercussions. Once again I put on record that the Royal Commission reported that the repercussions would be almost negligible. If the Chancellor feels unable to take the first step this year, I beg the Financial Secretary not to come out with the same absurd and irrelevant arguments, because women are tired of them.
We are told that we must have incentives. My party is very rightly committed to incentives. If we are to have incentives, does my right hon. Friend not realise that women as well as men want incentives? Of course, the


difference between the party opposite and my party is that the party opposite made unequivocal pledges, and when the Socialist Chancellor of the Exchequer got the chance to—

Mr. Douglas Houghton: The hon. Lady said that the difference between the two parties was that the party on this side of the House gave unequivocal pledges. Does she mean that her party gave equivocal pledges?

Miss Ward: That interruption is unnecessary because I had not dealt with my party. The Socialist Chancellor of the Exchequer failed to implement the specific pledges which had been given. The difficulty in the Conservative Party has been to get the party to make pledges. [Interruption.] Oh yes, there is all the difference. When we make a pledge we implement it. I realise that before the next General Election we shall be getting equal pay. I only want to tell my hon. Friend tonight that I beg him not to bring out these two reasons in his reply, because, if he does, he will infuriate a vast body of women who are called upon to bear heavy burdens in the national interest.
Although we are prepared to do everything we can to support the country, we do expect to get the same consideration as the rest of the community. Recently £30 million or £32 million was granted in additional salaries to the Civil Service. I am sure that those additions to salaries were justified, but one could equally argue inflationary pressure and its repercussions. Therefore, so that he may keep pace with his own party I am expecting to hear from the hon. Gentleman some other reasons why we have not been given at any rate an equal incentive to get on with the job as that given to the rest of the community.

3.8 a.m.

The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter): I have listened with a great deal of sympathy to what has been said by the hon. Member for Dunbartonshire, East (Mr. Bence) and the hon. Member for Tyne-mouth (Miss Ward). But the House will appreciate, I am sure, as both the hon. Members will appreciate, that the substantial financial and economic considerations which this issue inescapably raises have to be looked at not only on their individual merits but against the

background of our national economic difficulties. I am sure that neither of the hon. Members, however strongly he or she may feel about the merits of this issue, will dispute that.

Mr. Houghton: Why should the rate for the job for women be discussed in a different context from the rate for the job for men?

Mr. Boyd-Carpenter: It is impossible to discuss any issue involving financial factors of this kind and disregard the national economic position. I am certain that the hon. Gentleman appreciates that as well as I do. That was all I suggested, and that is the proposition which I am putting to the House at this stage of my argument. If the hon. Member will contain himself for a moment, I think he will find that the line of argument I propose to take will deal with the further considerations he has in mind.
It is important to recall—and I would ask the hon. Member for Sowerby (Mr. Houghton) to pay regard to it—that during the last few years the late Government, of which the hon. Member was a very distinguished and very vocal supporter, felt unable by reason of the nation's financial position to take the action which the hon. Gentleman and his hon. Friend are urging now. They refused to take it expressly on those very financial and economic grounds which the hon. Member for Sowerby now seems to be seeking to push aside.
Let me remind the House of what the right hon. Member for Leeds, South (Mr. Gaitskell) said on this issue as recently as 20th June of last year:
The Government therefore do not consider that they can proceed to extend the principle until the full consequences for the economy as a whole, including any necessary increase in family allowances, can be accepted within a relatively short period of time. That being so"—

Mr. Michael Foot: rose—

Mr. Boyd-Carpenter: The hon. Gentleman is a little too anxious to intervene. This is what his right hon. Friend said. I leave it to the hon. Gentleman to argue what his right hon. Friend meant, but I am telling the House what his right hon. Friend—

Mr. Foot: rose—

Mr. Boyd-Carpenter: I am sorry, but I am in the middle of quoting to the


House what was said by the right hon. Gentleman who was then the Chancellor of the Exchequer. With great respect to the hon. Member for Devonport (Mr. Foot), there could be no conceivable point at this stage which could possibly justify him intervening. I will finish what the right hon. Gentleman the Member for Leeds, South said:
That being so they have come with great regret to the conclusion that they cannot for the present depart from the decision announced in 1947. I am informing the National Staff Side accordingly."—[OFFICIAL REPORT, 20th June, 1951; Vol. 489, c. 529.]
That was the view expressed by the right hon. Gentleman who then held the position of Chancellor of the Exchequer, and it was based, as I understand it, upon the financial position of the country. No one is going to argue that our financial position now is better than it was last June, and therefore the House, and in particular hon. Members opposite, must give some weight to the considerations advanced by a leading member of their own Government on this issue in those circumstances.

Mr. Harold Davies: And the hon. Member for Tynemouth (Miss Ward).

Mr. Boyd-Carpenter: Yes, and by my hon. Friend who was not a supporter of the late Government. Nevertheless, Her Majesty's present advisers retain the sympathies and intentions in this matter which they have held all along. My hon. Friend referred to our election manifesto from which we do not retreat in any degree. We repeated in our manifesto what we said in our manifesto of 1950, which was this:
We hope that during the life of the next Parliament the country's financial position will improve sufficiently to enable us to proceed at an early date with the application in the Government service of the principles of equal pay for men and women for services of equal value.
The question really boils down to a matter of judgment as to when our national financial position will permit actual steps to be taken to implement equal pay.
It can be of some help to the House in making up its mind on this matter to be reminded of the facts which this or, indeed, any Government have got to consider in this connection. In the first place, let us take the Civil Service in the

strict sense of the term. There are 233,000 women in the Civil Service; of these approximately 200 receive equal pay and they are, mainly, doctors or medical women; 136,000 are doing what can be described as equal work; 97,000 are doing what is usually regarded as women's work. I do not know whether hon. Members seek to draw a line of distinction between those who are clearly doing equal work and those who are equally clearly not doing equal work. The matter is not an easy one—nothing in this particular subject is.
Of course, the concession of equal pay to those doing equal work and the implementation of the specific suggestions the hon. Member made would obviously involve the possibility of what I might call sympathetic increases in respect of those not doing equal work. It stands to reason that if we have women clerks and typists on closely related rates, we cannot put the women clerks' pay up on the grounds that they are doing equal work without the possibility of having to put up the pay of the typists who are not doing equal work.
Outside the Civil Service there are 1,500 policewomen, 500 firewomen, and 25,000 in the armed forces, all of whom are in that category, that is are not doing equal work, but are very likely to be affected by the sympathetic increase.

Mr. Ede: Does the hon. Gentleman say that policewomen do not do equal work to policemen?

Mr. Boyd-Carpenter: As I understand it, in the technical sense they do not, because they perform duties of women police officers and not of men.

Mr. Ede: The hon. Gentleman has been grossly misinformed.

Mr. Boyd-Carpenter: I know the right hon. Gentleman has great experience in this department, and if he expresses that view I have no doubt that there is a great deal in it. But it would not affect the purport of my argument if I concede the point to him. I am advised it is not the case, but if I may I will communicate with the right hon. Gentleman when I have cleared it up.
Then there is the Health Service, with 175,000 women, the majority of them being nurses. Of the 175,000, 2,000 or 3,000 administrative or professional


workers get equal pay. There are some 7,000 more who do equal work and do not get equal pay at present. Then there is the great mass of nurses—the greater part of the total. They are working at what is generally regarded as women's work. There are a certain number of male nurses, and it is at least arguable that they should be subject to equal pay. Besides the categories I have mentioned, there are women in such activities as local government and so on. The cost of making the concession in full would be £11 million a year for the Civil Service, in the narrow sense; £13 million additional in respect of teachers; and £4 million for the other categories mentioned. That involves a total increase in pay of £28 million a year.

Mr. Foot: That is exactly the figure the hon. Gentleman's colleague has given away in the Budget.

Mr. Boyd-Carpenter: If the hon. Gentleman will be good enough to contain himself I am going to deal with that in time. My hon. Friend the Member for Tynemouth referred to the recent pay increase in the Civil Service—the figure was actually £30 million and not £32 million. That followed the ordinary principle that rates of pay in the Civil Service should follow the comparable rates outside, and it seems to me that unless it is suggested that the Civil Service generally should be worse treated than other services, it is not really an argument that bears on this matter.

Miss Ward: It is not fair to use that argument, because it was never suggested. I am surprised that the hon. Gentleman should try to put that on the record. It is an entirely fallacious argument that I never raised at all.

Mr. Boyd-Carpenter: I am only too glad to acquit the hon. Lady of using the argument which, in my imperfect understanding, I understood her to use. The matter does not stop there. It is all very well for the hon. Lady to say she cannot bear to hear the repercussions—

Mr. Harold Davies: A stab in the back!

Mr. Boyd-Carpenter: It is all very well for her to say that and to refer to the Royal Commission. Let me remind her that a Royal Commission did report in

1946 and that there have been a good many changes in economic conditions in this country since 1946. Therefore, what the Royal Commission then found is not necessarily true in all respect in the changed conditions of today. It is, I think, the view of most people who have studied this matter—and it is one of the arguments put forward in defence of equal pay and in its favour—that were it to be introduced in the Government service it would not stop there and that, taken in industry outside.
That is a matter which must be considered when we are considering the economic repercussions of such a subject. The lead that the Government gives in this respect and others is generally and understandably followed by industry outside, and we must look at it, as the right hon. Member opposite did, on the basis of whether or not it is possible to release this considerable additional quantity of purchasing power at this particular time.
This is the issue that the House has got to face. My right hon. Friend the Chancellor of the Exchequer made it clear in the Parliamentary answer he gave, and in the letter that he wrote to the Secretary of the Staff Side, that as soon as the country's position had improved he hoped to be able to take steps towards implementation. That remains the policy of the Government.
We must be free to judge what is the moment at which this step can be taken without danger to our national economy. We shall judge the situation with due sympathy and with due regard to what we have said in the past and what we believe upon this issue. But we must remain free to judge—and this is part of the inescapable responsibility of government—when it is possible to take this step without endangering the national economy; and just as soon as it is possible we shall take steps to introduce these proposals. This Government have been in office four and a half months and—

The Question having been proposed after Ten o'Clock on Thursday evening. and the Debate having continued for half an hour. Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Twenty-four Minutes past Three o'Clock a.m.